Yahoo Finance Should Value Investors Buy Arkema (ARKAY) Stock?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Arkema (ARKAY) is a stock many investors are watching right now. ARKAY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.87, which compares to its industry's average of 13.02. Over the past 52 weeks, ARKAY's Forward P/E has been as high as 11.66 and as low as 5.66, with a median of 8.87.
Another notable valuation metric for ARKAY is its P/B ratio of 0.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.75. Within the past 52 weeks, ARKAY's P/B has been as high as 1.22 and as low as 0.65, with a median of 0.90.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARKAY has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.72.
Finally, investors should note that ARKAY has a P/CF ratio of 3.88. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.85. ARKAY's P/CF has been as high as 4.46 and as low as 2.50, with a median of 3.49, all within the past year.
Investors could also keep in mind Koppers (KOP), an Chemical - Diversified stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Koppers sports a P/B ratio of 1.62 as well; this compares to its industry's price-to-book ratio of 1.75. In the past 52 weeks, KOP's P/B has been as high as 1.98, as low as 1.10, with a median of 1.44.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arkema and Koppers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARKAY and KOP feels like a great value stock at the moment.
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Arkema SA (ARKAY) : Free Stock Analysis Report
Koppers Holdings Inc. (KOP) : Free Stock Analysis Report
