Yahoo Finance Are Investors Undervaluing Peabody Energy (BTU) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.
One company value investors might notice is Peabody Energy (BTU). BTU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 3.66, which compares to its industry's average of 3.85. Over the last 12 months, BTU's Forward P/E has been as high as 5.44 and as low as -15.66, with a median of 3.67.
We should also highlight that BTU has a P/B ratio of 1.50. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.84. Over the past year, BTU's P/B has been as high as 2.47 and as low as 0.70, with a median of 1.42.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BTU has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.01.
Finally, investors will want to recognize that BTU has a P/CF ratio of 3.61. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.71. Over the past year, BTU's P/CF has been as high as 73.33 and as low as 1.97, with a median of 4.17.
SunCoke Energy (SXC) may be another strong Coal stock to add to your shortlist. SXC is a # 2 (Buy) stock with a Value grade of A.
Additionally, SunCoke Energy has a P/B ratio of 0.99 while its industry's price-to-book ratio sits at 1.84. For SXC, this valuation metric has been as high as 1.51, as low as 0.84, with a median of 1.06 over the past year.
These are only a few of the key metrics included in Peabody Energy and SunCoke Energy strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BTU and SXC look like an impressive value stock at the moment.
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Peabody Energy Corporation (BTU) : Free Stock Analysis Report
SunCoke Energy, Inc. (SXC) : Free Stock Analysis Report
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