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Should Value Investors Buy Koppers (KOP) 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 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 Koppers (KOP - Free Report) . KOP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.77, while its industry has an average P/E of 12.80. Over the last 12 months, KOP's Forward P/E has been as high as 9.10 and as low as 4.99, with a median of 7.47.

Investors should also recognize that KOP has a P/B ratio of 1.66. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.88. Over the past year, KOP's P/B has been as high as 1.98 and as low as 1.26, with a median of 1.66.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KOP has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.7.

Finally, investors will want to recognize that KOP has a P/CF ratio of 5.55. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. KOP's current P/CF looks attractive when compared to its industry's average P/CF of 8.10. KOP's P/CF has been as high as 6.77 and as low as 3.63, with a median of 5.65, all within the past year.

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


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