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Is Methanex (MEOH) 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Methanex (MEOH - Free Report) . MEOH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.45. This compares to its industry's average Forward P/E of 11.82. Over the past 52 weeks, MEOH's Forward P/E has been as high as 20.04 and as low as 6.84, with a median of 10.64.

Another notable valuation metric for MEOH is its P/B ratio of 2.05. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. MEOH's current P/B looks attractive when compared to its industry's average P/B of 2.28. Over the past year, MEOH's P/B has been as high as 2.15 and as low as 1.34, with a median of 1.77.

Finally, we should also recognize that MEOH has a P/CF ratio of 4.88. 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 6.20. Over the past year, MEOH's P/CF has been as high as 11 and as low as 3.55, with a median of 5.57.

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


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