Back to top

Image: Bigstock

Is Arkema SA (ARKAY) Stock Undervalued Right Now?

Read MoreHide Full Article

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 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.

Arkema SA (ARKAY - Free Report) is a stock many investors are watching right now. ARKAY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 16.23, while its industry has an average P/E of 20.27. ARKAY's Forward P/E has been as high as 17.28 and as low as 8.99, with a median of 15.37, all within the past year.

We should also highlight that ARKAY has a P/B ratio of 1.53. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.70. Within the past 52 weeks, ARKAY's P/B has been as high as 1.55 and as low as 0.91, with a median of 1.35.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARKAY has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.15.

Finally, our model also underscores that ARKAY has a P/CF ratio of 11.41. 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. ARKAY's P/CF compares to its industry's average P/CF of 11.73. Over the past 52 weeks, ARKAY's P/CF has been as high as 11.61 and as low as 4.64, with a median of 7.28.

These are just a handful of the figures considered in Arkema SA'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 ARKAY is an impressive value stock right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Arkema SA (ARKAY) - free report >>

Published in