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Is Forterra (FRTA) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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.

One company to watch right now is Forterra (FRTA - Free Report) . FRTA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 18.92, while its industry has an average P/E of 29.05. FRTA's Forward P/E has been as high as 23.25 and as low as 7.60, with a median of 14.72, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FRTA has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.46.

Finally, we should also recognize that FRTA has a P/CF ratio of 10.13. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 22.15. Over the past 52 weeks, FRTA's P/CF has been as high as 10.19 and as low as 3.46, with a median of 7.53.

Value investors will likely look at more than just these metrics, but the above data helps show that Forterra is likely undervalued currently. And when considering the strength of its earnings outlook, FRTA sticks out at as one of the market's strongest value stocks.


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