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Is Warrior Met Coal (HCC) Stock Undervalued Right Now?

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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.

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 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.

Warrior Met Coal (HCC - Free Report) is a stock many investors are watching right now. HCC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that HCC has a P/B ratio of 1.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. HCC's current P/B looks attractive when compared to its industry's average P/B of 1.49. HCC's P/B has been as high as 2.05 and as low as 1.08, with a median of 1.34, over the past year.

Finally, investors should note that HCC has a P/CF ratio of 2.43. 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. HCC's current P/CF looks attractive when compared to its industry's average P/CF of 2.71. Over the past year, HCC's P/CF has been as high as 4.57 and as low as 1.81, with a median of 2.35.

SunCoke Energy (SXC - Free Report) may be another strong Coal stock to add to your shortlist. SXC is a # 2 (Buy) stock with a Value grade of A.

SunCoke Energy also has a P/B ratio of 1 compared to its industry's price-to-book ratio of 1.49. Over the past year, its P/B ratio has been as high as 1.38, as low as 0.79, with a median of 1.13.

Value investors will likely look at more than just these metrics, but the above data helps show that Warrior Met Coal and SunCoke Energy are likely undervalued currently. And when considering the strength of its earnings outlook, HCC and SXC sticks out as one of the market's strongest value stocks.


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