Are Investors Undervaluing Smart Sand (SND) Right Now?
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.
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 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.
Smart Sand (SND) is a stock many investors are watching right now. SND is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 6.19, while its industry has an average P/E of 12.25. Over the past year, SND's Forward P/E has been as high as 37.75 and as low as -109.37, with a median of -14.69.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SND has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.64.
Finally, investors will want to recognize that SND has a P/CF ratio of 2.70. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.76. SND's P/CF has been as high as 29.31 and as low as -8.18, with a median of 4.75, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Smart Sand is likely undervalued currently. And when considering the strength of its earnings outlook, SND sticks out at as one of the market's strongest value stocks.
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