Should Value Investors Buy ArcelorMittal (MT) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
ArcelorMittal (MT) is a stock many investors are watching right now. MT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.97, while its industry has an average P/E of 7.81. Over the past 52 weeks, MT's Forward P/E has been as high as 12.71 and as low as 2.06, with a median of 3.56.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MT has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.3.
Finally, investors should note that MT has a P/CF ratio of 2.05. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.50. Over the past 52 weeks, MT's P/CF has been as high as 2.37 and as low as 0.95, with a median of 1.47.
If you're looking for another solid Steel - Producers value stock, take a look at Olympic Steel (ZEUS). ZEUS is a # 1 (Strong Buy) stock with a Value score of A.
Furthermore, Olympic Steel holds a P/B ratio of 1.04 and its industry's price-to-book ratio is 1.60. ZEUS's P/B has been as high as 1.27, as low as 0.50, with a median of 0.73 over the past 12 months.
These are only a few of the key metrics included in ArcelorMittal 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, MT and ZEUS look like an impressive value stock at the moment.
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ArcelorMittal (MT) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
