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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One stock to keep an eye on is BASF (BASFY - Free Report) . BASFY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.11. This compares to its industry's average Forward P/E of 13.19. Over the past year, BASFY's Forward P/E has been as high as 12.03 and as low as 7.08, with a median of 9.45.
We also note that BASFY holds a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BASFY's industry currently sports an average PEG of 1.64. Over the last 12 months, BASFY's PEG has been as high as 0.67 and as low as 0.44, with a median of 0.53.
Investors should also recognize that BASFY has a P/B ratio of 1.11. 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 2.02. Over the past 12 months, BASFY's P/B has been as high as 1.23 and as low as 0.70, with a median of 0.93.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BASFY has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.72.
Another great Chemical - Diversified stock you could consider is Methanex (MEOH - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Methanex sports a P/B ratio of 1.24 as well; this compares to its industry's price-to-book ratio of 2.02. In the past 52 weeks, MEOH's P/B has been as high as 1.72, as low as 0.86, with a median of 1.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that BASF and Methanex are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BASFY and MEOH feels like a great value stock at the moment.
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Is BASF (BASFY) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One stock to keep an eye on is BASF (BASFY - Free Report) . BASFY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.11. This compares to its industry's average Forward P/E of 13.19. Over the past year, BASFY's Forward P/E has been as high as 12.03 and as low as 7.08, with a median of 9.45.
We also note that BASFY holds a PEG ratio of 0.61. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BASFY's industry currently sports an average PEG of 1.64. Over the last 12 months, BASFY's PEG has been as high as 0.67 and as low as 0.44, with a median of 0.53.
Investors should also recognize that BASFY has a P/B ratio of 1.11. 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 2.02. Over the past 12 months, BASFY's P/B has been as high as 1.23 and as low as 0.70, with a median of 0.93.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BASFY has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.72.
Another great Chemical - Diversified stock you could consider is Methanex (MEOH - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Methanex sports a P/B ratio of 1.24 as well; this compares to its industry's price-to-book ratio of 2.02. In the past 52 weeks, MEOH's P/B has been as high as 1.72, as low as 0.86, with a median of 1.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that BASF and Methanex are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BASFY and MEOH feels like a great value stock at the moment.