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Are Investors Undervaluing Kinross Gold (KGC) Right Now?

Zacks Equity Research
Darden Restaurants (DRI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Kinross Gold (KGC) is a stock many investors are watching right now. KGC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 26.11, while its industry has an average P/E of 31.94. Over the past year, KGC's Forward P/E has been as high as 30.49 and as low as 14.54, with a median of 20.17.

We should also highlight that KGC has a P/B ratio of 0.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.74. Over the past 12 months, KGC's P/B has been as high as 1.10 and as low as 0.66, with a median of 0.90.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KGC has a P/S ratio of 1.3. This compares to its industry's average P/S of 2.14.

Value investors will likely look at more than just these metrics, but the above data helps show that Kinross Gold is likely undervalued currently. And when considering the strength of its earnings outlook, KGC sticks out at as one of the market's strongest value stocks.


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