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Are Investors Undervaluing Sappi (SPPJY) Right Now?
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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 company to watch right now is Sappi (SPPJY - Free Report) . SPPJY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.29. This compares to its industry's average Forward P/E of 7.85. Over the past year, SPPJY's Forward P/E has been as high as 6.53 and as low as 2.19, with a median of 5.12.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SPPJY has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.44.
Finally, we should also recognize that SPPJY has a P/CF ratio of 1.71. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SPPJY's current P/CF looks attractive when compared to its industry's average P/CF of 4.55. Over the past 52 weeks, SPPJY's P/CF has been as high as 4.72 and as low as 1.54, with a median of 2.13.
If you're looking for another solid Paper and Related Products value stock, take a look at Suzano (SUZ - Free Report) . SUZ is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Suzano are currently trading at a forward earnings multiple of 5.30 and a PEG ratio of 0.61 compared to its industry's P/E and PEG ratios of 7.85 and 0.86, respectively.
Over the last 12 months, SUZ's P/E has been as high as 8.45, as low as 2.69, with a median of 4.77, and its PEG ratio has been as high as 0.84, as low as 0.24, with a median of 0.48.
Suzano sports a P/B ratio of 2.34 as well; this compares to its industry's price-to-book ratio of 2.74. In the past 52 weeks, SUZ's P/B has been as high as 6.21, as low as 2.10, with a median of 2.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sappi and Suzano are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SPPJY and SUZ feels like a great value stock at the moment.
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Are Investors Undervaluing Sappi (SPPJY) Right Now?
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 company to watch right now is Sappi (SPPJY - Free Report) . SPPJY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.29. This compares to its industry's average Forward P/E of 7.85. Over the past year, SPPJY's Forward P/E has been as high as 6.53 and as low as 2.19, with a median of 5.12.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SPPJY has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.44.
Finally, we should also recognize that SPPJY has a P/CF ratio of 1.71. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SPPJY's current P/CF looks attractive when compared to its industry's average P/CF of 4.55. Over the past 52 weeks, SPPJY's P/CF has been as high as 4.72 and as low as 1.54, with a median of 2.13.
If you're looking for another solid Paper and Related Products value stock, take a look at Suzano (SUZ - Free Report) . SUZ is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Suzano are currently trading at a forward earnings multiple of 5.30 and a PEG ratio of 0.61 compared to its industry's P/E and PEG ratios of 7.85 and 0.86, respectively.
Over the last 12 months, SUZ's P/E has been as high as 8.45, as low as 2.69, with a median of 4.77, and its PEG ratio has been as high as 0.84, as low as 0.24, with a median of 0.48.
Suzano sports a P/B ratio of 2.34 as well; this compares to its industry's price-to-book ratio of 2.74. In the past 52 weeks, SUZ's P/B has been as high as 6.21, as low as 2.10, with a median of 2.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sappi and Suzano are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SPPJY and SUZ feels like a great value stock at the moment.