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Should Value Investors Buy Rayonier Advanced Materials (RYAM) Stock?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Rayonier Advanced Materials (RYAM - Free Report) is a stock many investors are watching right now. RYAM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RYAM has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.43.

Finally, our model also underscores that RYAM has a P/CF ratio of 2.95. 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 3.43. Over the past year, RYAM's P/CF has been as high as 6.65 and as low as 0.80, with a median of 3.45.

Veritiv may be another strong Paper and Related Products stock to add to your shortlist. VRTV is a # 1 (Strong Buy) stock with a Value grade of A.

Veritiv is trading at a forward earnings multiple of 6.40 at the moment, with a PEG ratio of 0.41. This compares to its industry's average P/E of 7.25 and average PEG ratio of 0.85.

VRTV's price-to-earnings ratio has been as high as 10.23 and as low as 4.69, with a median of 7.25, while its PEG ratio has been as high as 0.62 and as low as 0.30, with a median of 0.48, all within the past year.

Furthermore, Veritiv holds a P/B ratio of 2.17 and its industry's price-to-book ratio is 2.24. VRTV's P/B has been as high as 3.52, as low as 1.96, with a median of 2.46 over the past 12 months.

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


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