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Is Posco (PKX) a Great Value Stock Right Now?

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·2 min read
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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 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.

Posco (PKX) is a stock many investors are watching right now. PKX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

We also note that PKX holds a PEG ratio of 2.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PKX's PEG compares to its industry's average PEG of 3. Over the past 52 weeks, PKX's PEG has been as high as 2.15 and as low as 1.39, with a median of 1.78.

We should also highlight that PKX has a P/B ratio of 0.70. 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. PKX's current P/B looks attractive when compared to its industry's average P/B of 0.91. Over the past 12 months, PKX's P/B has been as high as 0.70 and as low as 0.31, with a median of 0.41.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PKX has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.59.

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


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