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Are Investors Undervaluing Eastman Chemical (EMN) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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.

Eastman Chemical (EMN - Free Report) is a stock many investors are watching right now. EMN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.09, which compares to its industry's average of 15.68. EMN's Forward P/E has been as high as 14.10 and as low as 8.85, with a median of 10.45, all within the past year.

Finally, we should also recognize that EMN has a P/CF ratio of 8.36. 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 11.71. Over the past 52 weeks, EMN's P/CF has been as high as 9.98 and as low as 7, with a median of 8.19.

Value investors will likely look at more than just these metrics, but the above data helps show that Eastman Chemical is likely undervalued currently. And when considering the strength of its earnings outlook, EMN sticks out at as one of the market's strongest value stocks.

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