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Are These Basic Materials Stocks a Great Value Stocks Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Clearwater Paper (CLW). CLW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CLW has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.55.

Finally, our model also underscores that CLW has a P/CF ratio of 5.36. 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. CLW's P/CF compares to its industry's average P/CF of 12.51. CLW's P/CF has been as high as 8.11 and as low as 2.51, with a median of 4.65, all within the past year.

Another great Paper and Related Products stock you could consider is Mercer International (MERC), which is a # 1 (Strong Buy) stock with a Value Score of A.

Furthermore, Mercer International holds a P/B ratio of 1.39 and its industry's price-to-book ratio is 4.44. MERC's P/B has been as high as 2.02, as low as 1.07, with a median of 1.29 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Clearwater Paper and Mercer International are likely undervalued currently. And when considering the strength of its earnings outlook, CLW and MERC sticks out as one of the market's strongest value stocks.


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Clearwater Paper Corporation (CLW) : Free Stock Analysis Report
 
Mercer International Inc. (MERC) : Free Stock Analysis Report
 
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