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Is Kinross Gold (KGC) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 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.

One company value investors might notice is Kinross Gold (KGC). KGC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.46, which compares to its industry's average of 28.50. Over the past year, KGC's Forward P/E has been as high as 28.78 and as low as 10.19, with a median of 18.07.

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. KGC has a P/S ratio of 1.79. This compares to its industry's average P/S of 3.13.

Finally, investors should note that KGC has a P/CF ratio of 7.21. 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. KGC's P/CF compares to its industry's average P/CF of 9.76. Over the past year, KGC's P/CF has been as high as 9.29 and as low as 5.66, with a median of 6.63.

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


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