Are Investors Undervaluing Frontier Communications (FTR) Right Now?

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.

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.

Frontier Communications (FTR) is a stock many investors are watching right now. FTR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that FTR has a P/B ratio of 0.18. The P/B ratio pits a stock's market value against 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 0.41. Within the past 52 weeks, FTR's P/B has been as high as 0.37 and as low as 0.15, with a median of 0.25.

Finally, investors will want to recognize that FTR has a P/CF ratio of 0.10. 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. FTR's current P/CF looks attractive when compared to its industry's average P/CF of 0.33. FTR's P/CF has been as high as 0.38 and as low as 0.10, with a median of 0.18, all within the past year.

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