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Is Quanex Building Products (NX) Stock Undervalued 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Quanex Building Products (NX - Free Report) is a stock many investors are watching right now. NX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 17.37, which compares to its industry's average of 17.85. Over the past 52 weeks, NX's Forward P/E has been as high as 23.21 and as low as 12.51, with a median of 17.25.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NX has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.98.

Finally, our model also underscores that NX has a P/CF ratio of 9.36. 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 21.78. NX's P/CF has been as high as 10.23 and as low as 3.72, with a median of 8.28, all within the past year.

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


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