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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Gerdau (GGB). GGB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.58, which compares to its industry's average of 7.54. Over the past year, GGB's Forward P/E has been as high as 7.89 and as low as 3.45, with a median of 5.58.
We should also highlight that GGB has a P/B ratio of 0.93. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.58. Over the past 12 months, GGB's P/B has been as high as 1.33 and as low as 0.72, with a median of 0.99.
Finally, our model also underscores that GGB has a P/CF ratio of 1.98. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.30. Over the past 52 weeks, GGB's P/CF has been as high as 3.29 and as low as 1.90, with a median of 2.34.
Another great Steel - Producers stock you could consider is ArcelorMittal (MT), which is a # 1 (Strong Buy) stock with a Value Score of A.
Additionally, ArcelorMittal has a P/B ratio of 0.40 while its industry's price-to-book ratio sits at 1.58. For MT, this valuation metric has been as high as 0.56, as low as 0.33, with a median of 0.42 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Gerdau and ArcelorMittal are likely undervalued currently. And when considering the strength of its earnings outlook, GGB and MT sticks out as one of the market's strongest value stocks.
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