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Are Investors Undervaluing Rayonier Advanced Materials (RYAM) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 Rayonier Advanced Materials (RYAM - Free Report) . RYAM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

Another notable valuation metric for RYAM is its P/B ratio of 0.86. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RYAM's current P/B looks attractive when compared to its industry's average P/B of 2.54. Within the past 52 weeks, RYAM's P/B has been as high as 0.90 and as low as 0.26, with a median of 0.42.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. RYAM has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.85.

Finally, our model also underscores that RYAM has a P/CF ratio of 10.66. 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. RYAM's P/CF compares to its industry's average P/CF of 13.74. Within the past 12 months, RYAM's P/CF has been as high as 11.18 and as low as 1.82, with a median of 6.80.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Rayonier Advanced Materials is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RYAM feels like a great value stock at the moment.


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