Should Value Investors Buy Huntsman (HUN) Stock?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Huntsman (HUN). HUN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.97 right now. For comparison, its industry sports an average P/E of 11.45. Over the last 12 months, HUN's Forward P/E has been as high as 13.34 and as low as 7.64, with a median of 9.19.

We also note that HUN holds a PEG ratio of 0.66. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HUN's industry has an average PEG of 0.72 right now. Over the last 12 months, HUN's PEG has been as high as 1.51 and as low as 0.14, with a median of 0.18.

We should also highlight that HUN has a P/B ratio of 1.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. HUN's current P/B looks attractive when compared to its industry's average P/B of 2.27. Over the past 12 months, HUN's P/B has been as high as 1.97 and as low as 1.39, with a median of 1.71.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HUN has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.83.

Finally, we should also recognize that HUN has a P/CF ratio of 4.93. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.09. Within the past 12 months, HUN's P/CF has been as high as 10.04 and as low as 4.84, with a median of 6.44.

Methanex (MEOH) may be another strong Chemical - Diversified stock to add to your shortlist. MEOH is a # 1 (Strong Buy) stock with a Value grade of A.

Methanex also has a P/B ratio of 1.59 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 2.15, as low as 1.34, with a median of 1.75.

These are only a few of the key metrics included in Huntsman and Methanex strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, HUN and MEOH look like an impressive value stock at the moment.

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