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Are Investors Undervaluing Warrior Met Coal (HCC) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Warrior Met Coal (HCC - Free Report) . HCC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 4.62, while its industry has an average P/E of 7.80. Over the past 52 weeks, HCC's Forward P/E has been as high as 6.72 and as low as 2.67, with a median of 4.79.

Finally, we should also recognize that HCC has a P/CF ratio of 1.82. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HCC's P/CF compares to its industry's average P/CF of 2.30. Over the past 52 weeks, HCC's P/CF has been as high as 3.04 and as low as 1.49, with a median of 2.21.

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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