Should Value Investors Buy Outokumpu (OUTKY) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 to watch right now is Outokumpu (OUTKY). OUTKY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is OUTKY's P/B ratio of 0.54. The P/B ratio is used to compare a stock's market value with 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 1.29. Within the past 52 weeks, OUTKY's P/B has been as high as 0.87 and as low as 0.41, with a median of 0.64.
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. OUTKY has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.26.
Finally, we should also recognize that OUTKY has a P/CF ratio of 1.71. 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 3.71. Over the past year, OUTKY's P/CF has been as high as 3.85 and as low as 1.23, with a median of 1.98.
Salzgitter (SZGPY) may be another strong Steel - Producers stock to add to your shortlist. SZGPY is a # 2 (Buy) stock with a Value grade of A.
Salzgitter sports a P/B ratio of 0.31 as well; this compares to its industry's price-to-book ratio of 1.29. In the past 52 weeks, SZGPY's P/B has been as high as 0.70, as low as 0.20, with a median of 0.36.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Outokumpu and Salzgitter are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OUTKY and SZGPY feels like a great value stock at the moment.
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Outokumpu (OUTKY) : Free Stock Analysis Report
Salzgitter AG (SZGPY) : Free Stock Analysis Report
