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Is Cleveland-Cliffs (CLF) a Great Value Stock Right Now?

Zacks Equity Research
KeyCorp (KEY) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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.

Cleveland-Cliffs (CLF) is a stock many investors are watching right now. CLF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.45. This compares to its industry's average Forward P/E of 9.14. Over the past 52 weeks, CLF's Forward P/E has been as high as 8.23 and as low as 3.26, with a median of 6.15.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLF has a P/S ratio of 1.21. This compares to its industry's average P/S of 1.38.

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


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