Are Investors Undervaluing Univar Solutions (UNVR) 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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Univar Solutions (UNVR). UNVR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.35 right now. For comparison, its industry sports an average P/E of 10.65. Over the past year, UNVR's Forward P/E has been as high as 15.66 and as low as 7.54, with a median of 12.52.
We also note that UNVR holds a PEG ratio of 0.58. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UNVR's PEG compares to its industry's average PEG of 0.69. Over the last 12 months, UNVR's PEG has been as high as 1.21 and as low as 0.49, with a median of 0.96.
We should also highlight that UNVR has a P/B ratio of 1.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.22. Over the past 12 months, UNVR's P/B has been as high as 2.52 and as low as 1.51, with a median of 2.04.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UNVR has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.65.
Finally, our model also underscores that UNVR has a P/CF ratio of 5.78. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.97. Over the past 52 weeks, UNVR's P/CF has been as high as 10.31 and as low as 5.08, with a median of 7.34.
These are only a few of the key metrics included in Univar Solutions's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UNVR looks like an impressive value stock at the moment.
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