Back to top

Image: Bigstock

Is Kinross Gold (KGC) Stock Undervalued Right Now?

Read MoreHide Full Article

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

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 stock to keep an eye on is Kinross Gold (KGC - Free Report) . KGC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for KGC is its P/B ratio of 0.96. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. KGC's current P/B looks attractive when compared to its industry's average P/B of 1.18. Over the past year, KGC's P/B has been as high as 1.44 and as low as 0.83, with a median of 1.12.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KGC has a P/S ratio of 1.24. This compares to its industry's average P/S of 2.17.

Finally, investors will want to recognize that KGC has a P/CF ratio of 3.52. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.76. Within the past 12 months, KGC's P/CF has been as high as 9.29 and as low as 3.52, with a median of 6.40.

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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Kinross Gold Corporation (KGC) - free report >>

Published in