Are Investors Undervaluing Ryerson (RYI) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Ryerson (RYI) is a stock many investors are watching right now. RYI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Another valuation metric that we should highlight is RYI's P/B ratio of 1.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.68. Over the past 12 months, RYI's P/B has been as high as 1.77 and as low as 1.02, with a median of 1.38.
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 0.19. This compares to its industry's average P/S of 0.44.
Finally, investors should note that RYI has a P/CF ratio of 6.64. 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. RYI's current P/CF looks attractive when compared to its industry's average P/CF of 9.97. Over the past year, RYI's P/CF has been as high as 8.91 and as low as 1.76, with a median of 4.17.
If you're looking for another solid Steel - Producers value stock, take a look at SSAB (SSAAY). SSAAY is a # 2 (Buy) stock with a Value score of A.
SSAB also has a P/B ratio of 1.12 compared to its industry's price-to-book ratio of 1.68. Over the past year, its P/B ratio has been as high as 1.21, as low as 0.56, with a median of 1.
These are just a handful of the figures considered in Ryerson and SSAB's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RYI and SSAAY is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ryerson Holding Corporation (RYI) : Free Stock Analysis Report
SSAB (SSAAY) : Free Stock Analysis Report
