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

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 Israel Chemicals (ICL). ICL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.57. This compares to its industry's average Forward P/E of 17.89. ICL's Forward P/E has been as high as 18.11 and as low as 10.57, with a median of 13.54, all within the past year.

We also note that ICL holds a PEG ratio of 1.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ICL's PEG compares to its industry's average PEG of 1.74. Within the past year, ICL's PEG has been as high as 1.91 and as low as 1.11, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ICL has a P/S ratio of 1.09. This compares to its industry's average P/S of 1.57.

These are only a few of the key metrics included in Israel Chemicals'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, ICL looks like an impressive value stock at the moment.


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