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Is Posco (PKX) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

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, 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Posco (PKX) is a stock many investors are watching right now. PKX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.14. This compares to its industry's average Forward P/E of 10.20. Over the last 12 months, PKX's Forward P/E has been as high as 10.04 and as low as 4.78, with a median of 8.15.

Another valuation metric that we should highlight is PKX's P/B ratio of 0.55. 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. PKX's P/B has been as high as 0.59 and as low as 0.24, with a median of 0.38, over the past year.

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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