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Is Carpenter Technology (CRS) Stock Undervalued Right Now?

Zacks Equity Research

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.

One company value investors might notice is Carpenter Technology (CRS). CRS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We should also highlight that CRS has a P/B ratio of 1.38. 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 1.39. Over the past 12 months, CRS's P/B has been as high as 1.90 and as low as 1.07, with a median of 1.44.

Finally, we should also recognize that CRS has a P/CF ratio of 7.36. 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. CRS's P/CF compares to its industry's average P/CF of 9.69. CRS's P/CF has been as high as 9.48 and as low as 5.15, with a median of 8.08, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Carpenter Technology is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CRS feels like a great value stock at the moment.


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