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Are Investors Undervaluing Constellium (CSTM) Right Now?

·2 min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One company value investors might notice is Constellium (CSTM). CSTM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. CSTM has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.45.

Finally, investors will want to recognize that CSTM has a P/CF ratio of 4.95. 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. CSTM's P/CF compares to its industry's average P/CF of 10.31. Within the past 12 months, CSTM's P/CF has been as high as 8.29 and as low as 3.92, with a median of 4.72.

Value investors will likely look at more than just these metrics, but the above data helps show that Constellium is likely undervalued currently. And when considering the strength of its earnings outlook, CSTM sticks out at as one of the market's strongest value stocks.


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