We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Value Investors Buy Peabody Energy (BTU) Stock?
Read MoreHide Full Article
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, 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another notable valuation metric for BTU is its P/B ratio of 1.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. BTU's current P/B looks attractive when compared to its industry's average P/B of 2.16. Over the past year, BTU's P/B has been as high as 2.47 and as low as 0.70, with a median of 1.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BTU has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.16.
Finally, we should also recognize that BTU has a P/CF ratio of 4.68. 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 stock's P/CF looks attractive against its industry's average P/CF of 5.93. Within the past 12 months, BTU's P/CF has been as high as 110.47 and as low as -242.20, with a median of 4.63.
Value investors will likely look at more than just these metrics, but the above data helps show that Peabody Energy is likely undervalued currently. And when considering the strength of its earnings outlook, BTU sticks out at as one of the market's strongest value stocks.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Value Investors Buy Peabody Energy (BTU) Stock?
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, 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Peabody Energy (BTU - Free Report) . BTU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another notable valuation metric for BTU is its P/B ratio of 1.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. BTU's current P/B looks attractive when compared to its industry's average P/B of 2.16. Over the past year, BTU's P/B has been as high as 2.47 and as low as 0.70, with a median of 1.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BTU has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.16.
Finally, we should also recognize that BTU has a P/CF ratio of 4.68. 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 stock's P/CF looks attractive against its industry's average P/CF of 5.93. Within the past 12 months, BTU's P/CF has been as high as 110.47 and as low as -242.20, with a median of 4.63.
Value investors will likely look at more than just these metrics, but the above data helps show that Peabody Energy is likely undervalued currently. And when considering the strength of its earnings outlook, BTU sticks out at as one of the market's strongest value stocks.