Is Louisiana-Pacific (LPX) Stock Undervalued 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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Louisiana-Pacific (LPX). LPX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.30 right now. For comparison, its industry sports an average P/E of 19.01. Over the past year, LPX's Forward P/E has been as high as 32.30 and as low as 8.07, with a median of 11.42.
Finally, we should also recognize that LPX has a P/CF ratio of 12.47. 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. LPX's current P/CF looks attractive when compared to its industry's average P/CF of 29.22. Within the past 12 months, LPX's P/CF has been as high as 28.37 and as low as 6.60, with a median of 12.83.
Value investors will likely look at more than just these metrics, but the above data helps show that Louisiana-Pacific is likely undervalued currently. And when considering the strength of its earnings outlook, LPX sticks out at as one of the market's strongest value stocks.
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