Is Freeport-McMoRan (FCX) a Great Value Stock 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Freeport-McMoRan (FCX). FCX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.08. This compares to its industry's average Forward P/E of 11.54. Over the past year, FCX's Forward P/E has been as high as 20.97 and as low as 9.08, with a median of 13.41.

Investors should also note that FCX holds a PEG ratio of 0.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FCX's PEG compares to its industry's average PEG of 0.47. Within the past year, FCX's PEG has been as high as 0.76 and as low as 0.32, with a median of 0.49.

Another notable valuation metric for FCX is its P/B ratio of 2.49. 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 stock's P/B looks solid versus its industry's average P/B of 2.75. FCX's P/B has been as high as 3.34 and as low as 1.09, with a median of 2.26, over the past year.

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

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By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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