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Are These Basic Materials Stocks Undervalued 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, 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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Olin (OLN - Free Report) is a stock many investors are watching right now. OLN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 5.75, which compares to its industry's average of 12.01. Over the past 52 weeks, OLN's Forward P/E has been as high as 235.58 and as low as 5.75, with a median of 8.99.

Finally, our model also underscores that OLN has a P/CF ratio of 5.54. 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. OLN's P/CF compares to its industry's average P/CF of 10.89. OLN's P/CF has been as high as 21.07 and as low as 5.16, with a median of 10.93, all within the past year.

Investors could also keep in mind Tronox (TROX - Free Report) , an Chemical - Diversified stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Tronox sports a P/B ratio of 1.68 as well; this compares to its industry's price-to-book ratio of 2.42. In the past 52 weeks, TROX's P/B has been as high as 2.02, as low as 1.08, with a median of 1.60.

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


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