Is ArcelorMittal (MT) a Great Value Stock 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
ArcelorMittal (MT) is a stock many investors are watching right now. MT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 4.48, while its industry has an average P/E of 5.19. Over the past year, MT's Forward P/E has been as high as 490 and as low as -549.57, with a median of 6.12.
Another valuation metric that we should highlight is MT's P/B ratio of 0.75. 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. MT's current P/B looks attractive when compared to its industry's average P/B of 1.92. Over the past year, MT's P/B has been as high as 0.82 and as low as 0.29, with a median of 0.58.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. MT has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.6.
Finally, our model also underscores that MT has a P/CF ratio of 6.84. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.19. Over the past 52 weeks, MT's P/CF has been as high as 15.68 and as low as -12.35, with a median of 6.41.
Value investors will likely look at more than just these metrics, but the above data helps show that ArcelorMittal is likely undervalued currently. And when considering the strength of its earnings outlook, MT sticks out at as one of the market's strongest value stocks.
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