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Is Israel Chemicals (ICL) Stock Undervalued 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Israel Chemicals (ICL - Free Report) . ICL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.58. This compares to its industry's average Forward P/E of 17.98. Over the past year, ICL's Forward P/E has been as high as 18.11 and as low as 11.58, with a median of 13.65.

Investors will also notice that ICL has a PEG ratio of 1.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ICL's industry has an average PEG of 1.80 right now. ICL's PEG has been as high as 1.91 and as low as 1.23, with a median of 1.49, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ICL has a P/S ratio of 1.28. This compares to its industry's average P/S of 1.46.

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




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