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Can Stora Enso (SEOAY) be a Solid Choice for Value Investors?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Stora Enso Oyj (SEOAY - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Stora Enso has a trailing twelve months PE ratio of 19.4. This level compares favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.8.
If we focus on the long-term trend of the stock, the current level puts Stora Enso’s current PE above its median over the observed period (which stands at 16.5x). Hence, we could infer that the stock is overvalued in this respect, especially in light of its historical trend.
Nevertheless, the stock’s PE compares widely favorably with its industry’s trailing twelve months PE ratio, which stands at 21.7. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Stora Enso has a forward PE ratio (price relative to this year’s earnings) of 16.3 – much lower than the current level. So, it is fair to say that a more value-oriented path may be ahead for Stora Enso stock in the near term.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Stora Enso has a P/S ratio of about 1.1. This is lower than the industry average, which comes in at 1.3x right now.
SEOAY is actually in the highest zone of its trading range in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Stora Enso currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Stora Enso a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Stora Enso is just 1.8, a level that is lower than the industry average of 2.1. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, SEOAY is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Stora Enso might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of B and a Momentum score of B. This gives SEOAY a Zacks VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>).
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Stora Enso seems to have pretty striking prospects.
Meanwhile, the company’s earnings estimates have been trending upward lately. The current year has seen two estimates go higher in the past thirty days compared to none lower, while the next year estimate has seen one upward revision and no downward revisions in the same time period.
This has had just a small impact on the consensus estimate though as the current year consensus estimate has risen 1.1% in the past month, while the next year estimate has increased 2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Stora Enso is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. With a formidable industry rank (among the Top 34% out of more than 25 industries) and strong Zacks Rank, Stora Enso looks like a strong value contender.
In fact, over the past year, the industry it belongs to has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
5 Trades Could Profit "Big-League" from Trump Policies
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Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
Image: Bigstock
Can Stora Enso (SEOAY) be a Solid Choice for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Stora Enso Oyj (SEOAY - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Stora Enso has a trailing twelve months PE ratio of 19.4. This level compares favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.8.
If we focus on the long-term trend of the stock, the current level puts Stora Enso’s current PE above its median over the observed period (which stands at 16.5x). Hence, we could infer that the stock is overvalued in this respect, especially in light of its historical trend.
Nevertheless, the stock’s PE compares widely favorably with its industry’s trailing twelve months PE ratio, which stands at 21.7. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Stora Enso has a forward PE ratio (price relative to this year’s earnings) of 16.3 – much lower than the current level. So, it is fair to say that a more value-oriented path may be ahead for Stora Enso stock in the near term.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Stora Enso has a P/S ratio of about 1.1. This is lower than the industry average, which comes in at 1.3x right now.
SEOAY is actually in the highest zone of its trading range in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Stora Enso currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Stora Enso a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Stora Enso is just 1.8, a level that is lower than the industry average of 2.1. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, SEOAY is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Stora Enso might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of B and a Momentum score of B. This gives SEOAY a Zacks VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>).
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Stora Enso seems to have pretty striking prospects.
Meanwhile, the company’s earnings estimates have been trending upward lately. The current year has seen two estimates go higher in the past thirty days compared to none lower, while the next year estimate has seen one upward revision and no downward revisions in the same time period.
This has had just a small impact on the consensus estimate though as the current year consensus estimate has risen 1.1% in the past month, while the next year estimate has increased 2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Stora Enso Oyj Price and Consensus
Stora Enso Oyj Price and Consensus | Stora Enso Oyj Quote
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Stora Enso is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. With a formidable industry rank (among the Top 34% out of more than 25 industries) and strong Zacks Rank, Stora Enso looks like a strong value contender.
In fact, over the past year, the industry it belongs to has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
See these buy recommendations now >>