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Is Posco (PKX) Stock Undervalued 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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Posco (PKX) is a stock many investors are watching right now. PKX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

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 0.52. This compares to its industry's average P/S of 0.6.

Finally, investors will want to recognize that PKX has a P/CF ratio of 4.72. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. PKX's P/CF compares to its industry's average P/CF of 11.86. Within the past 12 months, PKX's P/CF has been as high as 5.85 and as low as 3.76, with a median of 4.71.

These are just a handful of the figures considered in Posco'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 PKX is an impressive value stock right now.


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