Are Investors Undervaluing Warrior Met Coal (HCC) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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.
One company value investors might notice is Warrior Met Coal (HCC). HCC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.21, which compares to its industry's average of 7.65. Over the past 52 weeks, HCC's Forward P/E has been as high as 6.72 and as low as 2.67, with a median of 4.81.
Finally, investors will want to recognize that HCC has a P/CF ratio of 2.06. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. HCC's current P/CF looks attractive when compared to its industry's average P/CF of 2.58. Within the past 12 months, HCC's P/CF has been as high as 3.04 and as low as 1.49, with a median of 2.27.
These are only a few of the key metrics included in Warrior Met Coal'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, HCC looks like an impressive value stock at the moment.
Click to get this free report
Warrior Met Coal Inc. (HCC): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.