Markets

Should Value Investors Buy Kinross Gold (KGC) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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.

Kinross Gold (KGC) is a stock many investors are watching right now. KGC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.32, which compares to its industry's average of 18.52. Over the last 12 months, KGC's Forward P/E has been as high as 30.49 and as low as 10.32, with a median of 23.77.

Another valuation metric that we should highlight is KGC's P/B ratio of 1.10. 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. This stock's P/B looks attractive against its industry's average P/B of 1.17. Over the past 12 months, KGC's P/B has been as high as 1.44 and as low as 0.67, with a median of 0.95.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KGC has a P/S ratio of 1.63. This compares to its industry's average P/S of 2.8.

Finally, investors should note that KGC has a P/CF ratio of 6.08. 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. KGC's P/CF compares to its industry's average P/CF of 9.70. Over the past year, KGC's P/CF has been as high as 9.29 and as low as 3.08, with a median of 6.40.

Value investors will likely look at more than just these metrics, but the above data helps show that Kinross Gold is likely undervalued currently. And when considering the strength of its earnings outlook, KGC sticks out at as one of the market's strongest value stocks.


Click to get this free report

Kinross Gold Corporation (KGC): 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.

Latest Markets Videos