Are Investors Undervaluing Ryerson (RYI) Right Now?
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.
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 company value investors might notice is Ryerson (RYI). RYI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A 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. RYI has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.32.
Finally, our model also underscores that RYI has a P/CF ratio of 4.85. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.10. Over the past year, RYI's P/CF has been as high as 4.85 and as low as 1.32, with a median of 2.18.
If you're looking for another solid Steel - Producers value stock, take a look at United States Steel (X). X is a # 2 (Buy) stock with a Value score of A.
Additionally, United States Steel has a P/B ratio of 0.54 while its industry's price-to-book ratio sits at 1.61. For X, this valuation metric has been as high as 0.69, as low as 0.39, with a median of 0.54 over the past year.
These are only a few of the key metrics included in Ryerson and United States Steel strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, RYI and X look like an impressive value stock at the moment.
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Ryerson Holding Corporation (RYI) : Free Stock Analysis Report
United States Steel Corporation (X) : Free Stock Analysis Report
