Should Value Investors Buy Ternium (TX) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Ternium (TX). TX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.22, while its industry has an average P/E of 9.72. Over the last 12 months, TX's Forward P/E has been as high as 12.43 and as low as 3.23, with a median of 6.54.
Finally, our model also underscores that TX has a P/CF ratio of 8.78. 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. TX's current P/CF looks attractive when compared to its industry's average P/CF of 11.15. TX's P/CF has been as high as 9.15 and as low as 1.80, with a median of 4.25, all within the past year.
Olympic Steel (ZEUS) may be another strong Steel - Producers stock to add to your shortlist. ZEUS is a # 2 (Buy) stock with a Value grade of A.
Additionally, Olympic Steel has a P/B ratio of 1.36 while its industry's price-to-book ratio sits at 1.67. For ZEUS, this valuation metric has been as high as 1.38, as low as 0.70, with a median of 1.04 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ternium and Olympic Steel are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TX and ZEUS feels like a great value stock at the moment.
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Ternium S.A. (TX) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
