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Should Value Investors Buy Posco (PKX) Stock?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Posco (PKX). PKX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.36 right now. For comparison, its industry sports an average P/E of 13.60. PKX's Forward P/E has been as high as 9.57 and as low as 4.78, with a median of 7.97, all within the past year.

Another valuation metric that we should highlight is PKX's P/B ratio of 0.38. 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 solid versus its industry's average P/B of 0.91. Over the past year, PKX's P/B has been as high as 0.48 and as low as 0.24, with a median of 0.38.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Posco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PKX feels like a great value stock at the moment.


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