Is Intrepid Potash (IPI) Stock Undervalued 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 latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Intrepid Potash (IPI) is a stock many investors are watching right now. IPI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 12.55, while its industry has an average P/E of 15.18. Over the past 52 weeks, IPI's Forward P/E has been as high as 47.29 and as low as 12.55, with a median of 18.49.

Another valuation metric that we should highlight is IPI's P/B ratio of 0.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. IPI's current P/B looks attractive when compared to its industry's average P/B of 2.05. IPI's P/B has been as high as 1.39 and as low as 0.82, with a median of 1.08, over the past year.

Finally, our model also underscores that IPI has a P/CF ratio of 7.15. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.44. Within the past 12 months, IPI's P/CF has been as high as 15.04 and as low as 7.15, with a median of 10.16.

Value investors will likely look at more than just these metrics, but the above data helps show that Intrepid Potash is likely undervalued currently. And when considering the strength of its earnings outlook, IPI sticks out at as one of the market's strongest value stocks.

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