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Should Value Investors Buy LSC Communications (LKSD) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is LSC Communications . LKSD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We should also highlight that LKSD has a P/B ratio of 1.19. The P/B ratio pits a stock's market value against 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 3.21. Over the past year, LKSD's P/B has been as high as 2.57 and as low as 1.02, with a median of 1.70.

Finally, we should also recognize that LKSD has a P/CF ratio of 1.75. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.58. Over the past year, LKSD's P/CF has been as high as 3.45 and as low as 1.75, with a median of 2.44.

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

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