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Should Value Investors Buy BASF SE (BASFY) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is BASF SE (BASFY - Free Report) . BASFY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.36. This compares to its industry's average Forward P/E of 12.27. BASFY's Forward P/E has been as high as 18.82 and as low as 11.03, with a median of 15.69, all within the past year.

Another notable valuation metric for BASFY is its P/B ratio of 1.52. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.54. Over the past year, BASFY's P/B has been as high as 2.04 and as low as 1.24, with a median of 1.62.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BASFY has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.01.

Finally, investors should note that BASFY has a P/CF ratio of 6.69. 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 stock's P/CF looks attractive against its industry's average P/CF of 11.01. Within the past 12 months, BASFY's P/CF has been as high as 14.32 and as low as 6.37, with a median of 10.38.

These are just a handful of the figures considered in BASF SE's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BASFY is an impressive value stock right now.


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