Should Value Investors Buy Sasol (SSL) 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.
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 Sasol (SSL). SSL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.68 right now. For comparison, its industry sports an average P/E of 8.07. Over the last 12 months, SSL's Forward P/E has been as high as 6.18 and as low as 3.98, with a median of 4.73.
SSL is also sporting a PEG ratio of 0.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SSL's PEG compares to its industry's average PEG of 0.58. Over the past 52 weeks, SSL's PEG has been as high as 0.43 and as low as 0.24, with a median of 0.29.
We should also highlight that SSL has a P/B ratio of 0.92. 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 solid versus its industry's average P/B of 1.43. Over the past year, SSL's P/B has been as high as 1.57 and as low as 0.74, with a median of 1.03.
YPF Sociedad Anonima (YPF) may be another strong Oil and Gas - Integrated - International stock to add to your shortlist. YPF is a # 1 (Strong Buy) stock with a Value grade of A.
YPF Sociedad Anonima also has a P/B ratio of 0.46 compared to its industry's price-to-book ratio of 1.43. Over the past year, its P/B ratio has been as high as 0.48, as low as 0.11, with a median of 0.22.
These are just a handful of the figures considered in Sasol and YPF Sociedad Anonima'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 SSL and YPF is an impressive value stock right now.
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