Should Value Investors Buy Boise Cascade (BCC) Stock?
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.
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.
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 Boise Cascade (BCC). BCC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.41, which compares to its industry's average of 26.77. Over the last 12 months, BCC's Forward P/E has been as high as 12.74 and as low as 7.47, with a median of 9.35.
Investors should also recognize that BCC has a P/B ratio of 2.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.41. Over the past year, BCC's P/B has been as high as 2.36 and as low as 1.12, with a median of 1.65.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BCC has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.36.
Finally, we should also recognize that BCC has a P/CF ratio of 8.71. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 28.55. Within the past 12 months, BCC's P/CF has been as high as 8.71 and as low as 2.49, with a median of 5.60.
These are just a handful of the figures considered in Boise Cascade's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BCC is an impressive value stock right now.
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Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
