Should Value Investors Buy Ternium S.A. (TX) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Ternium S.A. (TX) is a stock many investors are watching right now. TX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
We also note that TX holds a PEG ratio of 0.30. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TX's PEG compares to its industry's average PEG of 0.34. Over the last 12 months, TX's PEG has been as high as 2.81 and as low as 0.24, with a median of 0.75.
We should also highlight that TX has a P/B ratio of 1.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. TX's current P/B looks attractive when compared to its industry's average P/B of 2.01. Over the past year, TX's P/B has been as high as 1.13 and as low as 0.39, with a median of 0.75.
Finally, investors will want to recognize that TX has a P/CF ratio of 4.95. 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. TX's P/CF compares to its industry's average P/CF of 11.70. TX's P/CF has been as high as 6.78 and as low as 3.20, with a median of 4.24, all within the past year.
These are just a handful of the figures considered in Ternium S.A.'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 TX is an impressive value stock right now.
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