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Is Celanese (CE) Stock Undervalued 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is Celanese (CE). CE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.95. This compares to its industry’s average Forward P/E of 18. Over the past year, CE’s Forward P/E has been as high as 14.54 and as low as 9.95, with a median of 11.92.

We also note that CE holds a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. CE’s PEG compares to its industry’s average PEG of 1.47. CE’s PEG has been as high as 1.71 and as low as 1, with a median of 1.33, all within the past year.

Another valuation metric that we should highlight is CE’s P/B ratio of 3.89. 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. CE’s current P/B looks attractive when compared to its industry’s average P/B of 7.59. CE’s P/B has been as high as 4.69 and as low as 3.64, with a median of 4.21, over the past year.

Finally, our model also underscores that CE has a P/CF ratio of 10.16. 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. This stock’s P/CF looks attractive against its industry’s average P/CF of 20.83. CE’s P/CF has been as high as 13.48 and as low as 9.99, with a median of 11.72, all within the past year.

These are just a handful of the figures considered in Celanese’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 CE is an impressive value stock right now.

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