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Should Value Investors Buy Clearwater Paper (CLW) 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, 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.
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 company to watch right now is Clearwater Paper (CLW - Free Report) . CLW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Another valuation metric that we should highlight is CLW's P/B ratio of 1.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.84. Within the past 52 weeks, CLW's P/B has been as high as 1.43 and as low as 0.82, with a median of 1.11.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLW has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.53.
Finally, our model also underscores that CLW has a P/CF ratio of 3.97. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.42. Over the past year, CLW's P/CF has been as high as 8.20 and as low as 3.74, with a median of 5.65.
If you're looking for another solid Paper and Related Products value stock, take a look at Veritiv (VRTV - Free Report) . VRTV is a # 2 (Buy) stock with a Value score of A.
Veritiv is currently trading with a Forward P/E ratio of 8.38 while its PEG ratio sits at 0.56. Both of the company's metrics compare favorably to its industry's average P/E of 7.92 and average PEG ratio of 0.93.