Is Summit Materials (SUM) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.
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 Summit Materials (SUM). SUM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that SUM has a P/B ratio of 1.89. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. SUM's current P/B looks attractive when compared to its industry's average P/B of 4.04. Over the past 12 months, SUM's P/B has been as high as 2.27 and as low as 1.48, with a median of 1.85.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SUM has a P/S ratio of 1.61. This compares to its industry's average P/S of 1.93.
Finally, investors should note that SUM has a P/CF ratio of 10.11. 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 24.41. Over the past 52 weeks, SUM's P/CF has been as high as 12.14 and as low as 5.87, with a median of 7.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Summit Materials is likely undervalued currently. And when considering the strength of its earnings outlook, SUM sticks out at as one of the market's strongest value stocks.
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Summit Materials, Inc. (SUM) : Free Stock Analysis Report
