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Is Tronox (TROX) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Tronox (TROX - Free Report) . TROX is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.59 right now. For comparison, its industry sports an average P/E of 12.22. Over the last 12 months, TROX's Forward P/E has been as high as 14.75 and as low as 7.26, with a median of 10.69.
We should also highlight that TROX has a P/B ratio of 2.01. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.54. Over the past year, TROX's P/B has been as high as 2.02 and as low as 0.71, with a median of 1.46.
Finally, we should also recognize that TROX has a P/CF ratio of 3.02. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TROX's current P/CF looks attractive when compared to its industry's average P/CF of 11.03. TROX's P/CF has been as high as 3.02 and as low as 0.99, with a median of 2.19, all within the past year.
These are only a few of the key metrics included in Tronox'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, TROX looks like an impressive value stock at the moment.