Is Koppers (KOP) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company to watch right now is Koppers (KOP). KOP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.09. This compares to its industry's average Forward P/E of 12.99. KOP's Forward P/E has been as high as 8.56 and as low as 4.57, with a median of 6.56, all within the past year.
Another valuation metric that we should highlight is KOP's P/B ratio of 1.53. The P/B ratio is used to compare a stock's market value with 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 1.97. Within the past 52 weeks, KOP's P/B has been as high as 1.98 and as low as 1.10, with a median of 1.50.
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. KOP has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.69.
Finally, our model also underscores that KOP has a P/CF ratio of 5.42. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.01. Over the past 52 weeks, KOP's P/CF has been as high as 6.77 and as low as 3.35, with a median of 4.64.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Koppers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KOP feels like a great value stock at the moment.
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Koppers Holdings Inc. (KOP) : Free Stock Analysis Report
