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Should Value Investors Buy Reynolds Consumer Products (REYN) Stock?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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 stock to keep an eye on is Reynolds Consumer Products (REYN - Free Report) . REYN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another notable valuation metric for REYN is its P/B ratio of 2.68. The P/B is a method of comparing a stock's market value to 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 6.51. REYN's P/B has been as high as 3.35 and as low as 2.64, with a median of 3, over the past year.

Finally, investors will want to recognize that REYN has a P/CF ratio of 11.15. 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. REYN's current P/CF looks attractive when compared to its industry's average P/CF of 38.54. Over the past 52 weeks, REYN's P/CF has been as high as 14.72 and as low as 10.97, with a median of 13.06.

These are just a handful of the figures considered in Reynolds Consumer Products'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 REYN is an impressive value stock right now.


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