Is CF Industries (CF) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

CF Industries (CF) is a stock many investors are watching right now. CF is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 12.48 right now. For comparison, its industry sports an average P/E of 13.28. Over the past 52 weeks, CF's Forward P/E has been as high as 16.16 and as low as 11.10, with a median of 14.30.

Investors should also note that CF holds a PEG ratio of 0.39. 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. CF's industry currently sports an average PEG of 1.16. Over the past 52 weeks, CF's PEG has been as high as 2.67 and as low as 0.30, with a median of 0.70.

Finally, we should also recognize that CF has a P/CF ratio of 6.39. 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. CF's current P/CF looks attractive when compared to its industry's average P/CF of 13.61. Over the past year, CF's P/CF has been as high as 8.02 and as low as 5.19, with a median of 7.04.

These are just a handful of the figures considered in CF Industries'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 CF is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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