Are Investors Undervaluing ArcelorMittal (MT) 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.
One stock to keep an eye on is ArcelorMittal (MT). MT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 5.20, which compares to its industry's average of 6.37. Over the past year, MT's Forward P/E has been as high as 11.33 and as low as 5.20, with a median of 8.57.
Another valuation metric that we should highlight is MT's P/B ratio of 0.68. 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 attractive against its industry's average P/B of 1.38. Over the past 12 months, MT's P/B has been as high as 0.93 and as low as 0.68, with a median of 0.79.
Finally, investors will want to recognize that MT has a P/CF ratio of 3.52. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MT's current P/CF looks attractive when compared to its industry's average P/CF of 7.53. MT's P/CF has been as high as 5.21 and as low as 3.51, with a median of 4.46, all within the past year.
These are only a few of the key metrics included in ArcelorMittal's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MT looks like an impressive value stock at the moment.
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