Should Value Investors Buy Carpenter Technology (CRS) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Carpenter Technology (CRS). CRS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.99 right now. For comparison, its industry sports an average P/E of 12.23. Over the last 12 months, CRS's Forward P/E has been as high as 22.57 and as low as 9.31, with a median of 13.16.
Another valuation metric that we should highlight is CRS's P/B ratio of 1.29. 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. CRS's current P/B looks attractive when compared to its industry's average P/B of 1.58. Within the past 52 weeks, CRS's P/B has been as high as 1.99 and as low as 1.07, with a median of 1.51.
Finally, investors will want to recognize that CRS has a P/CF ratio of 7.25. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.52. Over the past 52 weeks, CRS's P/CF has been as high as 9.64 and as low as 5.15, with a median of 8.50.
These are only a few of the key metrics included in Carpenter Technology'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, CRS looks like an impressive value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.