Should Value Investors Buy Quanex Building Products (NX) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Quanex Building Products (NX) is a stock many investors are watching right now. NX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.60, while its industry has an average P/E of 13.74. Over the past year, NX's Forward P/E has been as high as 18.04 and as low as 10.36, with a median of 12.
Another valuation metric that we should highlight is NX's P/B ratio of 1.69. Investors use the P/B ratio to look at a stock's market value versus 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 3.20. NX's P/B has been as high as 2.52 and as low as 1.65, with a median of 1.89, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. NX has a P/S ratio of 0.65. This compares to its industry's average P/S of 1.41.
Finally, investors should note that NX has a P/CF ratio of 6.99. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 17.59. Over the past year, NX's P/CF has been as high as 10.23 and as low as 6.70, with a median of 7.75.
These are just a handful of the figures considered in Quanex Building Products'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 NX is an impressive value stock right now.
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