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Is Clearwater Paper (CLW) a Great Value Stock Right Now?

·3 min read

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 company to watch right now is Clearwater Paper (CLW). CLW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CLW has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.49.

Finally, investors will want to recognize that CLW has a P/CF ratio of 4.87. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.93. CLW's P/CF has been as high as 8.20 and as low as 3.79, with a median of 6.64, all within the past year.

Rayonier Advanced Materials (RYAM) may be another strong Paper and Related Products stock to add to your shortlist. RYAM is a # 2 (Buy) stock with a Value grade of A.

Rayonier Advanced Materials is trading at a forward earnings multiple of -8.30 at the moment, with a PEG ratio of -2.74. This compares to its industry's average P/E of 6.40 and average PEG ratio of 0.52.

RYAM's Forward P/E has been as high as 7,351.96 and as low as -421.84, with a median of -8.06. During the same time period, its PEG ratio has been as high as 3,451.63, as low as -198.05, with a median of -4.07.

Additionally, Rayonier Advanced Materials has a P/B ratio of 0.40 while its industry's price-to-book ratio sits at 0.75. For RYAM, this valuation metric has been as high as 0.66, as low as 0.21, with a median of 0.47 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Clearwater Paper and Rayonier Advanced Materials are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLW and RYAM feels like a great value stock at the moment.


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Clearwater Paper Corporation (CLW) : Free Stock Analysis Report
 
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