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Should Value Investors Buy KBR Inc. (KBR) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is KBR Inc. (KBR - Free Report) . KBR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.53 right now. For comparison, its industry sports an average P/E of 14.71. KBR's Forward P/E has been as high as 16.12 and as low as 11.05, with a median of 13.12, all within the past year.

Investors should also recognize that KBR has a P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. KBR's current P/B looks attractive when compared to its industry's average P/B of 2. KBR's P/B has been as high as 3.44 and as low as 1.37, with a median of 1.92, over the past year.

Finally, investors will want to recognize that KBR has a P/CF ratio of 5.41. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.88. Within the past 12 months, KBR's P/CF has been as high as 149.63 and as low as 3.80, with a median of 5.19.

Value investors will likely look at more than just these metrics, but the above data helps show that KBR Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, KBR sticks out at as one of the market's strongest value stocks.


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