Is Rio Tinto (RIO) Stock Undervalued 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is Rio Tinto (RIO). RIO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.74, which compares to its industry's average of 11.98. Over the past 52 weeks, RIO's Forward P/E has been as high as 11.83 and as low as 5.36, with a median of 7.52.
Another notable valuation metric for RIO is its P/B ratio of 1.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RIO's current P/B looks attractive when compared to its industry's average P/B of 3.75. Over the past year, RIO's P/B has been as high as 1.86 and as low as 1.13, with a median of 1.51.
Investors could also keep in mind Teck Resources (TECK), an Mining - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Teck Resources is currently trading with a Forward P/E ratio of 10.10 while its PEG ratio sits at 1.86. Both of the company's metrics compare favorably to its industry's average P/E of 11.98 and average PEG ratio of 1.18.
TECK's price-to-earnings ratio has been as high as 10.26 and as low as 4.16, with a median of 6.50, while its PEG ratio has been as high as 5.32 and as low as 0.11, with a median of 0.96, all within the past year.
Furthermore, Teck Resources holds a P/B ratio of 1.05 and its industry's price-to-book ratio is 3.75. TECK's P/B has been as high as 1.23, as low as 0.65, with a median of 0.92 over the past 12 months.
These are just a handful of the figures considered in Rio Tinto and Teck Resources'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 RIO and TECK is an impressive value stock right now.
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Rio Tinto PLC (RIO) : Free Stock Analysis Report
Teck Resources Ltd (TECK) : Free Stock Analysis Report
