Should Value Investors Buy AdvanSix (ASIX) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 AdvanSix (ASIX). ASIX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.88, while its industry has an average P/E of 16.75. Over the past 52 weeks, ASIX’s Forward P/E has been as high as 11.16 and as low as 6.60, with a median of 9.11.

Another valuation metric that we should highlight is ASIX’s P/B ratio of 2.40. 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. This stock’s P/B looks attractive against its industry’s average P/B of 6.74. Within the past 52 weeks, ASIX’s P/B has been as high as 2.66 and as low as 1.52, with a median of 1.95.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ASIX has a P/S ratio of 0.85. This compares to its industry’s average P/S of 1.79.

Finally, our model also underscores that ASIX has a P/CF ratio of 7.34. 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. ASIX’s P/CF compares to its industry’s average P/CF of 27.92. Over the past 52 weeks, ASIX’s P/CF has been as high as 8.12 and as low as 4.89, with a median of 6.43.

These are only a few of the key metrics included in AdvanSix’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, ASIX looks like an impressive value stock at the moment.

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