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Is Israel Chemicals (ICL) a Great Value Stock Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Israel Chemicals (ICL). ICL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.93, while its industry has an average P/E of 18.11. Over the past 52 weeks, ICL's Forward P/E has been as high as 18.11 and as low as 11.30, with a median of 13.65.

Investors will also notice that ICL has a PEG ratio of 1.26. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ICL's industry currently sports an average PEG of 1.74. Over the last 12 months, ICL's PEG has been as high as 1.91 and as low as 1.19, with a median of 1.35.

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. ICL has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.65.

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


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