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Is Alpha Metallurgical Resources (AMR) Stock Undervalued Right Now?

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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.

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.

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.

Alpha Metallurgical Resources (AMR - Free Report) is a stock many investors are watching right now. AMR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.58, which compares to its industry's average of 11.13. Over the past 52 weeks, AMR's Forward P/E has been as high as 13.15 and as low as 3.66, with a median of 6.60.

Investors should also recognize that AMR has a P/B ratio of 3.59. 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 5.14. Over the past year, AMR's P/B has been as high as 4.26 and as low as 1.31, with a median of 2.01.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AMR has a P/S ratio of 1.43. This compares to its industry's average P/S of 2.26.

Finally, investors will want to recognize that AMR has a P/CF ratio of 5.68. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 20.17. Within the past 12 months, AMR's P/CF has been as high as 6.75 and as low as 1.46, with a median of 2.95.

These are just a handful of the figures considered in Alpha Metallurgical Resources's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AMR is an impressive value stock right now.


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