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Is Louisiana-Pacific (LPX) Stock Undervalued Right Now?

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

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.

One company to watch right now is Louisiana-Pacific (LPX). LPX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.42 right now. For comparison, its industry sports an average P/E of 18.53. Over the last 12 months, LPX's Forward P/E has been as high as 12.22 and as low as 5.79, with a median of 8.92.

Finally, investors will want to recognize that LPX has a P/CF ratio of 5. 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. LPX's P/CF compares to its industry's average P/CF of 19.88. Over the past year, LPX's P/CF has been as high as 14.59 and as low as 3.84, with a median of 7.57.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Louisiana-Pacific is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LPX feels like a great value stock at the moment.


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