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Should Value Investors Buy Warrior Met Coal (HCC) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Warrior Met Coal (HCC - Free Report) is a stock many investors are watching right now. HCC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 4.74, which compares to its industry's average of 7.99. Over the past year, HCC's Forward P/E has been as high as 6.72 and as low as 2.67, with a median of 4.82.

Finally, investors will want to recognize that HCC has a P/CF ratio of 1.88. 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. HCC's current P/CF looks attractive when compared to its industry's average P/CF of 2.39. HCC's P/CF has been as high as 3.04 and as low as 1.49, with a median of 2.24, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Warrior Met Coal is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HCC feels like a great value stock at the moment.


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