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Is Westlake Chemical (WLK) Stock Undervalued Right Now?

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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Westlake Chemical (WLK) is a stock many investors are watching right now. WLK is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

We should also highlight that WLK has a P/B ratio of 1.61. 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 1.65. Over the past year, WLK's P/B has been as high as 1.97 and as low as 1.38, with a median of 1.62.

Finally, we should also recognize that WLK has a P/CF ratio of 5.63. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.98. Over the past 52 weeks, WLK's P/CF has been as high as 11.24 and as low as 5.17, with a median of 9.61.

These are only a few of the key metrics included in Westlake Chemical's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, WLK looks like an impressive value stock at the moment.


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