jessebrown schreef op 25 januari 2022 17:42:
Are These Basic Materials Stocks Undervalued Right Now?
Zacks Equity Research
Tue, January 25, 2022, 3:40 PM
In this article:
YARO.OL
-0.07%
CF
+2.98%
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
CF Industries (CF) is a stock many investors are watching right now. CF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 5.29 right now. For comparison, its industry sports an average P/E of 7.40. CF's Forward P/E has been as high as 28.76 and as low as 5.29, with a median of 13.98, all within the past year.
Finally, investors should note that CF has a P/CF ratio of 12.03. 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. CF's current P/CF looks attractive when compared to its industry's average P/CF of 14.16. Within the past 12 months, CF's P/CF has been as high as 13.55 and as low as 6.98, with a median of 8.56.
Another great Fertilizers stock you could consider is Yara International ASA (YARIY), which is a # 1 (Strong Buy) stock with a Value Score of A.
Furthermore, Yara International ASA holds a P/B ratio of 1.82 and its industry's price-to-book ratio is 1.86. YARIY's P/B has been as high as 1.98, as low as 1.46, with a median of 1.75 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 CF Industries and Yara International ASA are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CF and YARIY feels like a great value stock at the moment.