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Are Investors Undervaluing These Basic Materials Stocks Right Now?
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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 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.
One company to watch right now is Alpha Metallurgical Resources (AMR - Free Report) . AMR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
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. AMR has a P/S ratio of 1.11. This compares to its industry's average P/S of 3.01.
Finally, investors will want to recognize that AMR has a P/CF ratio of 5.58. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.61. AMR's P/CF has been as high as 19.55 and as low as -17.58, with a median of -0.87, all within the past year.
Teck Resources (TECK - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. TECK is a # 1 (Strong Buy) stock with a Value grade of A.
Teck Resources is trading at a forward earnings multiple of 6.46 at the moment, with a PEG ratio of 0.17. This compares to its industry's average P/E of 10.14 and average PEG ratio of 1.08.
Over the last 12 months, TECK's P/E has been as high as 12.27, as low as 6.23, with a median of 8.32, and its PEG ratio has been as high as 0.61, as low as 0.16, with a median of 0.25.
Teck Resources also has a P/B ratio of 1.12 compared to its industry's price-to-book ratio of 1.43. Over the past year, its P/B ratio has been as high as 1.17, as low as 0.61, with a median of 0.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Alpha Metallurgical Resources and Teck Resources are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMR and TECK feels like a great value stock at the moment.
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Are Investors Undervaluing These Basic Materials Stocks Right Now?
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 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.
One company to watch right now is Alpha Metallurgical Resources (AMR - Free Report) . AMR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
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. AMR has a P/S ratio of 1.11. This compares to its industry's average P/S of 3.01.
Finally, investors will want to recognize that AMR has a P/CF ratio of 5.58. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.61. AMR's P/CF has been as high as 19.55 and as low as -17.58, with a median of -0.87, all within the past year.
Teck Resources (TECK - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. TECK is a # 1 (Strong Buy) stock with a Value grade of A.
Teck Resources is trading at a forward earnings multiple of 6.46 at the moment, with a PEG ratio of 0.17. This compares to its industry's average P/E of 10.14 and average PEG ratio of 1.08.
Over the last 12 months, TECK's P/E has been as high as 12.27, as low as 6.23, with a median of 8.32, and its PEG ratio has been as high as 0.61, as low as 0.16, with a median of 0.25.
Teck Resources also has a P/B ratio of 1.12 compared to its industry's price-to-book ratio of 1.43. Over the past year, its P/B ratio has been as high as 1.17, as low as 0.61, with a median of 0.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Alpha Metallurgical Resources and Teck Resources are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMR and TECK feels like a great value stock at the moment.