Is Frontier Communications (FTR) a Great Value Stock Right Now?
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 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 Frontier Communications (FTR). FTR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also recognize that FTR has a P/B ratio of 0.16. 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. This stock's P/B looks attractive against its industry's average P/B of 0.41. Over the past 12 months, FTR's P/B has been as high as 0.39 and as low as 0.16, with a median of 0.25.
Finally, we should also recognize that FTR has a P/CF ratio of 0.10. 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. FTR's P/CF compares to its industry's average P/CF of 0.31. Within the past 12 months, FTR's P/CF has been as high as 0.38 and as low as 0.10, with a median of 0.18.
These are just a handful of the figures considered in Frontier Communications's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FTR is an impressive value stock right now.