Are Investors Undervaluing Huntsman (HUN) Right Now?

HUN

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Huntsman (HUN - Free Report) is a stock many investors are watching right now. HUN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.65. This compares to its industry's average Forward P/E of 20.17. Over the last 12 months, HUN's Forward P/E has been as high as 27.47 and as low as 11.46, with a median of 15.99.

We also note that HUN holds a PEG ratio of 1.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HUN's industry currently sports an average PEG of 3.11. Within the past year, HUN's PEG has been as high as 4.33 and as low as 1.32, with a median of 1.95.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HUN has a P/S ratio of 1.08. This compares to its industry's average P/S of 1.19.

Finally, investors should note that HUN has a P/CF ratio of 4.95. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.73. Over the past year, HUN's P/CF has been as high as 4.97 and as low as 2.34, with a median of 4.22.

These are only a few of the key metrics included in Huntsman's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HUN looks like an impressive value stock at the moment.

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