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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company value investors might notice is LyondellBasell (LYB). LYB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.58, while its industry has an average P/E of 11.39. Over the past year, LYB's Forward P/E has been as high as 10.07 and as low as 6.87, with a median of 8.08.
LYB is also sporting a PEG ratio of 0.84. 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. LYB's industry currently sports an average PEG of 1.08. Over the last 12 months, LYB's PEG has been as high as 1.10 and as low as 0.75, with a median of 0.88.
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. LYB has a P/S ratio of 0.82. This compares to its industry's average P/S of 0.85.
Finally, we should also recognize that LYB has a P/CF ratio of 5.74. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.06. Within the past 12 months, LYB's P/CF has been as high as 6.46 and as low as 4.31, with a median of 5.62.
These are only a few of the key metrics included in LyondellBasell'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, LYB looks like an impressive value stock at the moment.
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LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report
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