One FTSE 100 value stock I'd buy, one I'd hold, and one I'd sell

Despite shares in Smurfit Kappa(LSE: SKG) storming higher in recent weeks -- the packager has gained 17% in value since the start of the year -- I believe bargain hunters should still consider piling into the stock.

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Smurfit Kappa is setting itself up to deliver long-term profits growth via aggressive global expansion. The business snapped up three US operators and one in the UK in 2016 alone, and has both the appetite and financial firepower to undertake further bolt-on buys in the near future.

The City doesn't expect plain sailing over at the firm in the immediate future however, and predicts that high input costs will see the business follow last year's 4% earnings slip with a 7% decline in 2017. However, the packaging powerhouse is anticipated to get its growth story back on track with a 7% rise in 2018.

And these readings result in P/E ratios of just 12.6 times and 11.8 times for this year and next, well below the FTSE 100 average of 15 times.

Risks rising?

I have long argued that Babcock International (LSE: BAB) is a strong pick for reliable earnings growth year after year.

A spate of new contract wins helped Babcock's order book and pipeline to a robust £30.8bn as of the end of February, it recently advised.

The support services giant has certainly fared better than its sector rivals like Serco, Capita and Mitie, who have either issued profit warnings and/or warned of tough conditions in recent months. Having said that, given Babcock's similar reliance on a strong UK economy to drive sales, and British economic growth looking increasingly-bumpy, I reckon the engineer could also find itself under pressure.

The City seems unperturbed at present and expects the company to follow an 8% earnings rise in the year to March 2017 with a 7% advance next year. And these figures result in great P/E ratios 11.2 times and 10.4 times.

I don't think investors should hit the panic button just yet -- Babcock is a top-quality stock with a great diversified base of operations, after all. But eagle-eyed stock pickers should be watchful for signs of worsening conditions in the company's core markets in the months ahead.

In a hole

While also throwing up terrific paper valuations, I believe BHP Billiton (LSE: BLT) is not worth the risk as fears over juiced-up commodity prices persist.

Crude values sank back below the $50 per barrel marker this week for the first time since November as fears over persisting oversupply have ramped up. And in iron ore, BHP Billiton's other major market, values of the steelmaking ingredient are also on the back foot as mining supply rises and underlying Chinese demand remains patchy.

Given these worrying fundamental factors, City brokers expect the firm's touted earnings recovery to remain short-lived, an anticipated 471% rise in the year to June 2017 expected to be followed by an 11% dip in the following period.

BHP Billiton's stratospheric 60% share price ascent over the past year leaves the business in danger of a painful share price reversal, in my opinion. And I reckon investors should consequently shun low P/E ratings of 11.9 times and 13.4 times for 2017 and 2018 respectively.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.