Should Value Investors Buy Suzano (SUZ) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Suzano (SUZ). SUZ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 3.90, which compares to its industry's average of 5.53. Over the past year, SUZ's Forward P/E has been as high as 8.45 and as low as 3.73, with a median of 4.63.
We also note that SUZ holds a PEG ratio of 0.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SUZ's PEG compares to its industry's average PEG of 0.54. Within the past year, SUZ's PEG has been as high as 0.84 and as low as 0.36, with a median of 0.46.
Investors should also recognize that SUZ has a P/B ratio of 2.24. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.52. Over the past 12 months, SUZ's P/B has been as high as 6.21 and as low as 2.24, with a median of 4.57.
Finally, investors will want to recognize that SUZ has a P/CF ratio of 3. 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 8. SUZ's P/CF has been as high as 5.90 and as low as 2.19, with a median of 3.19, all within the past year.
Veritiv (VRTV) may be another strong Paper and Related Products stock to add to your shortlist. VRTV is a # 1 (Strong Buy) stock with a Value grade of A.
Veritiv is currently trading with a Forward P/E ratio of 5.36 while its PEG ratio sits at 0.32. Both of the company's metrics compare favorably to its industry's average P/E of 5.53 and average PEG ratio of 0.54.
Over the last 12 months, VRTV's P/E has been as high as 19.54, as low as 5.36, with a median of 9.44, and its PEG ratio has been as high as 0.62, as low as 0.32, with a median of 0.50.
Furthermore, Veritiv holds a P/B ratio of 2.11 and its industry's price-to-book ratio is 2.52. VRTV's P/B has been as high as 4.10, as low as 2.04, with a median of 2.82 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Suzano and Veritiv are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SUZ and VRTV feels like a great value stock at the moment.
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