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Are Investors Undervaluing AdvanSix (ASIX) Right Now?

Zacks Equity Research
In the latest trading session, Construction Partners (ROAD) closed at $13.75, marking a +0.22% move from the previous day.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 AdvanSix (ASIX). ASIX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.98, which compares to its industry's average of 17.45. Over the past year, ASIX's Forward P/E has been as high as 13.85 and as low as 6.39, with a median of 9.71.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ASIX has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.27.

Finally, investors should note that ASIX has a P/CF ratio of 5.26. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.90. Over the past year, ASIX's P/CF has been as high as 7.03 and as low as 4.13, with a median of 5.88.

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


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