Should Value Investors Buy Boise Cascade (BCC) Stock?
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.
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.
Boise Cascade (BCC) is a stock many investors are watching right now. BCC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.23, which compares to its industry's average of 14.41. Over the last 12 months, BCC's Forward P/E has been as high as 21 and as low as 5.23, with a median of 13.14.
We also note that BCC holds a PEG ratio of 0.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BCC's industry has an average PEG of 0.65 right now. Over the past 52 weeks, BCC's PEG has been as high as 3.86 and as low as 0.51, with a median of 1.30.
Another notable valuation metric for BCC is its P/B ratio of 1.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. BCC's current P/B looks attractive when compared to its industry's average P/B of 3.68. BCC's P/B has been as high as 2.98 and as low as 1.88, with a median of 2.36, over the past year.
Finally, investors should note that BCC has a P/CF ratio of 4.81. 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. BCC's current P/CF looks attractive when compared to its industry's average P/CF of 18.05. Over the past year, BCC's P/CF has been as high as 10.20 and as low as 4.81, with a median of 7.03.
These are just a handful of the figures considered in Boise Cascade'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 BCC is an impressive value stock right now.
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