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 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 company to watch right now is Rayonier Advanced Materials (RYAM - Free Report) . RYAM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
RYAM is also sporting a PEG ratio of 0.43. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RYAM's industry currently sports an average PEG of 0.57. Over the last 12 months, RYAM's PEG has been as high as 6.73 and as low as 0.37, with a median of 2.22.
Another notable valuation metric for RYAM is its P/B ratio of 1.46. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RYAM's current P/B looks attractive when compared to its industry's average P/B of 1.73. RYAM's P/B has been as high as 3.83 and as low as 1.11, with a median of 1.42, over the past year.
Finally, investors should note that RYAM has a P/CF ratio of 2.54. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. RYAM's current P/CF looks attractive when compared to its industry's average P/CF of 4.94. RYAM's P/CF has been as high as 8.07 and as low as 2.07, with a median of 2.70, all within the past year.
These are just a handful of the figures considered in Rayonier Advanced Materials'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 RYAM is an impressive value stock right now.