Are These Basic Materials Stocks a Great Value Stocks Right Now?
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 proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Asahi Kasei (AHKSY). AHKSY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.28, which compares to its industry's average of 12.59. AHKSY's Forward P/E has been as high as 17.82 and as low as 11.28, with a median of 13.05, all within the past year.
Another valuation metric that we should highlight is AHKSY's P/B ratio of 0.99. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. AHKSY's current P/B looks attractive when compared to its industry's average P/B of 2.46. AHKSY's P/B has been as high as 1.28 and as low as 0.97, with a median of 1.10, over the past year.
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. AHKSY has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.94.
Finally, investors will want to recognize that AHKSY has a P/CF ratio of 5.64. 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. AHKSY's current P/CF looks attractive when compared to its industry's average P/CF of 11.46. AHKSY's P/CF has been as high as 8.69 and as low as 5.64, with a median of 7.44, all within the past year.
If you're looking for another solid Chemical - Diversified value stock, take a look at Arkema (ARKAY). ARKAY is a # 2 (Buy) stock with a Value score of A.
Shares of Arkema currently holds a Forward P/E ratio of 13.23, and its PEG ratio is 0.41. In comparison, its industry sports average P/E and PEG ratios of 12.59 and 0.60.
ARKAY's Forward P/E has been as high as 17.28 and as low as 12.22, with a median of 15.31. During the same time period, its PEG ratio has been as high as 8.37, as low as 0.40, with a median of 0.64.
Furthermore, Arkema holds a P/B ratio of 1.55 and its industry's price-to-book ratio is 2.46. ARKAY's P/B has been as high as 1.60, as low as 1.32, with a median of 1.46 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Asahi Kasei and Arkema are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AHKSY and ARKAY feels like a great value stock at the moment.
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