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 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.
Rayonier Advanced Materials (RYAM - Free Report) is a stock many investors are watching right now. RYAM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 6.94, while its industry has an average P/E of 7.84. Over the past year, RYAM's Forward P/E has been as high as 33.63 and as low as 6.94, with a median of 10.75.
Investors should also note that RYAM holds a PEG ratio of 0.32. 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 has an average PEG of 0.52 right now. Over the past 52 weeks, RYAM's PEG has been as high as 6.73 and as low as 0.32, with a median of 2.15.
We should also highlight that RYAM has a P/B ratio of 1.07. Investors use the P/B ratio to look at a stock's market value versus 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 1.53. Over the past 12 months, RYAM's P/B has been as high as 3.83 and as low as 1.07, with a median of 1.37.
Finally, we should also recognize that RYAM has a P/CF ratio of 1.89. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.17. Over the past 52 weeks, RYAM's P/CF has been as high as 8.07 and as low as 1.89, with a median of 2.62.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rayonier Advanced Materials is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RYAM feels like a great value stock at the moment.