Should Value Investors Buy Commercial Metals (CMC) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.
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.
One company to watch right now is Commercial Metals (CMC). CMC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.58, while its industry has an average P/E of 8.07. Over the past year, CMC's Forward P/E has been as high as 9.95 and as low as 6.58, with a median of 7.99.
Another notable valuation metric for CMC is its P/B ratio of 1.22. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.46. Over the past year, CMC's P/B has been as high as 1.87 and as low as 1.22, with a median of 1.58.
Finally, our model also underscores that CMC has a P/CF ratio of 4.73. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.61. Over the past 52 weeks, CMC's P/CF has been as high as 6.32 and as low as 3.43, with a median of 4.60.
Ternium (TX) may be another strong Steel - Producers stock to add to your shortlist. TX is a # 2 (Buy) stock with a Value grade of A.
Additionally, Ternium has a P/B ratio of 0.51 while its industry's price-to-book ratio sits at 1.46. For TX, this valuation metric has been as high as 0.66, as low as 0.39, with a median of 0.55 over the past year.
These are just a handful of the figures considered in Commercial Metals and Ternium'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 CMC and TX is an impressive value stock right now.
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Commercial Metals Company (CMC) : Free Stock Analysis Report
Ternium S.A. (TX) : Free Stock Analysis Report
