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Is Arkema (ARKAY) Stock 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 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.

Arkema (ARKAY - Free Report) is a stock many investors are watching right now. ARKAY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 6.44, which compares to its industry's average of 10.07. Over the last 12 months, ARKAY's Forward P/E has been as high as 14.20 and as low as 6.44, with a median of 11.

Another valuation metric that we should highlight is ARKAY's P/B ratio of 0.75. 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. ARKAY's current P/B looks attractive when compared to its industry's average P/B of 2.08. Over the past 12 months, ARKAY's P/B has been as high as 1.55 and as low as 0.75, with a median of 1.25.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARKAY has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.6.

Finally, investors will want to recognize that ARKAY has a P/CF ratio of 2.91. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ARKAY's current P/CF looks attractive when compared to its industry's average P/CF of 6.43. Over the past 52 weeks, ARKAY's P/CF has been as high as 4.78 and as low as 2.50, with a median of 3.52.

Brennt (BNTGY - Free Report) may be another strong Chemical - Diversified stock to add to your shortlist. BNTGY is a # 2 (Buy) stock with a Value grade of A.

Brennt sports a P/B ratio of 2.03 as well; this compares to its industry's price-to-book ratio of 2.08. In the past 52 weeks, BNTGY's P/B has been as high as 3.44, as low as 1.87, with a median of 2.62.

These are only a few of the key metrics included in Arkema and Brennt strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ARKAY and BNTGY look like an impressive value stock at the moment.


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