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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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is Methanex (MEOH). MEOH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.09. This compares to its industry's average Forward P/E of 16.48. Over the past 52 weeks, MEOH's Forward P/E has been as high as 19.13 and as low as 9.09, with a median of 12.74.
Another valuation metric that we should highlight is MEOH's P/B ratio of 1.13. 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. MEOH's current P/B looks attractive when compared to its industry's average P/B of 1.67. Over the past 12 months, MEOH's P/B has been as high as 1.67 and as low as 1.08, with a median of 1.38.
Finally, investors will want to recognize that MEOH has a P/CF ratio of 4.89. 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. MEOH's P/CF compares to its industry's average P/CF of 10.33. MEOH's P/CF has been as high as 6.73 and as low as 4.54, with a median of 5.80, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Methanex is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MEOH feels like a great value stock at the moment.
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