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Should Value Investors Buy Klabin (KLBAY) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Klabin (KLBAY - Free Report) . KLBAY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.47 right now. For comparison, its industry sports an average P/E of 6.97. Over the past 52 weeks, KLBAY's Forward P/E has been as high as 10.79 and as low as 3.55, with a median of 4.87.

KLBAY is also sporting a PEG ratio of 0.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KLBAY's industry currently sports an average PEG of 0.63. Over the last 12 months, KLBAY's PEG has been as high as 0.59 and as low as 0.17, with a median of 0.26.

Investors should also recognize that KLBAY has a P/B ratio of 2.36. 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 solid versus its industry's average P/B of 2.66. KLBAY's P/B has been as high as 4.71 and as low as 1.98, with a median of 2.37, over the past year.

Investors could also keep in mind Mercer International (MERC - Free Report) , an Paper and Related Products stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, Mercer International holds a P/B ratio of 1.07 and its industry's price-to-book ratio is 2.66. MERC's P/B has been as high as 1.52, as low as 1.03, with a median of 1.25 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Klabin and Mercer International are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KLBAY and MERC feels like a great value stock at the moment.


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