Are Investors Undervaluing Ternium (TX) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Ternium (TX). TX is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.11, while its industry has an average P/E of 7.75. Over the last 12 months, TX's Forward P/E has been as high as 12.43 and as low as 3.23, with a median of 6.78.
Investors should also recognize that TX has a P/B ratio of 0.52. 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 1.38. Over the past year, TX's P/B has been as high as 0.66 and as low as 0.40, with a median of 0.55.
Finally, investors should note that TX has a P/CF ratio of 4.12. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.05. TX's P/CF has been as high as 4.89 and as low as 1.61, with a median of 3.82, all within the past year.
Olympic Steel (ZEUS) may be another strong Steel - Producers stock to add to your shortlist. ZEUS is a # 1 (Strong Buy) stock with a Value grade of A.
Olympic Steel also has a P/B ratio of 1 compared to its industry's price-to-book ratio of 1.38. Over the past year, its P/B ratio has been as high as 1.27, as low as 0.52, with a median of 1.01.
These are only a few of the key metrics included in Ternium and Olympic 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, TX and ZEUS look like an impressive value stock at the moment.
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Ternium S.A. (TX) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
