Should Value Investors Buy Ryerson (RYI) 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.
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 Ryerson (RYI). RYI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. RYI has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.35.
Finally, our model also underscores that RYI has a P/CF ratio of 4.84. 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. RYI's current P/CF looks attractive when compared to its industry's average P/CF of 8.69. RYI's P/CF has been as high as 4.91 and as low as 1.53, with a median of 2.71, all within the past year.
If you're looking for another solid Steel - Producers value stock, take a look at Steel Dynamics (STLD). STLD is a # 2 (Buy) stock with a Value score of A.
Additionally, Steel Dynamics has a P/B ratio of 2.13 while its industry's price-to-book ratio sits at 1.67. For STLD, this valuation metric has been as high as 3.02, as low as 1.60, with a median of 2.19 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ryerson and Steel Dynamics are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RYI and STLD feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ryerson Holding Corporation (RYI) : Free Stock Analysis Report
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
