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Should Value Investors Buy Intrepid Potash (IPI) Stock?

Zacks Equity Research

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Intrepid Potash (IPI). IPI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.20, while its industry has an average P/E of 14.62. IPI's Forward P/E has been as high as 47.29 and as low as 14.20, with a median of 21.21, all within the past year.

Another valuation metric that we should highlight is IPI's P/B ratio of 0.96. 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. IPI's current P/B looks attractive when compared to its industry's average P/B of 2.07. Within the past 52 weeks, IPI's P/B has been as high as 1.55 and as low as 0.82, with a median of 1.15.

Value investors will likely look at more than just these metrics, but the above data helps show that Intrepid Potash is likely undervalued currently. And when considering the strength of its earnings outlook, IPI sticks out at as one of the market's strongest value stocks.


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