Is Canadian Solar (CSIQ) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Canadian Solar (CSIQ) is a stock many investors are watching right now. CSIQ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is CSIQ's P/B ratio of 1.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.93. Over the past 12 months, CSIQ's P/B has been as high as 1.10 and as low as 0.55, with a median of 0.81.
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. CSIQ has a P/S ratio of 0.45. This compares to its industry's average P/S of 1.1.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Canadian Solar is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CSIQ feels like a great value stock at the moment.
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Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
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