Is Sappi (SPPJY) a Great Value Stock Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Sappi (SPPJY). SPPJY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 5.04. This compares to its industry's average Forward P/E of 7.18. SPPJY's Forward P/E has been as high as 6.08 and as low as 2.19, with a median of 4.84, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SPPJY has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.44.
Finally, our model also underscores that SPPJY has a P/CF ratio of 1.81. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.47. Over the past year, SPPJY's P/CF has been as high as 4.72 and as low as 1.54, with a median of 2.29.
Another great Paper and Related Products stock you could consider is Suzano (SUZ), which is a # 1 (Strong Buy) stock with a Value Score of A.
Shares of Suzano are currently trading at a forward earnings multiple of 2.78 and a PEG ratio of 0.25 compared to its industry's P/E and PEG ratios of 7.18 and 0.66, respectively.
SUZ's price-to-earnings ratio has been as high as 8.45 and as low as 2.69, with a median of 4.74, while its PEG ratio has been as high as 0.84 and as low as 0.24, with a median of 0.48, all within the past year.
Suzano also has a P/B ratio of 2.39 compared to its industry's price-to-book ratio of 2.70. Over the past year, its P/B ratio has been as high as 6.21, as low as 2.10, with a median of 2.68.
Value investors will likely look at more than just these metrics, but the above data helps show that Sappi and Suzano are likely undervalued currently. And when considering the strength of its earnings outlook, SPPJY and SUZ sticks out as one of the market's strongest value stocks.
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Sappi Ltd. (SPPJY) : Free Stock Analysis Report
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