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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 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.
One company value investors might notice is Ryerson (RYI - Free Report) . RYI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 1.74, while its industry has an average P/E of 3.69. Over the last 12 months, RYI's Forward P/E has been as high as 12.28 and as low as 1.74, with a median of 7.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 0.13. This compares to its industry's average P/S of 0.27.
Finally, investors should note that RYI has a P/CF ratio of 1.71. 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. RYI's P/CF compares to its industry's average P/CF of 3.11. Within the past 12 months, RYI's P/CF has been as high as 7.07 and as low as -206.30, with a median of 3.92.
Investors could also keep in mind Ternium (TX - Free Report) , an Steel - Producers stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Ternium is currently trading with a Forward P/E ratio of 3.36 while its PEG ratio sits at 0.22. Both of the company's metrics compare favorably to its industry's average P/E of 3.69 and average PEG ratio of 0.28.
Over the last 12 months, TX's P/E has been as high as 5.97, as low as 2.32, with a median of 3.99, and its PEG ratio has been as high as 0.30, as low as 0.13, with a median of 0.20.
Ternium also has a P/B ratio of 0.55 compared to its industry's price-to-book ratio of 0.87. Over the past year, its P/B ratio has been as high as 1.13, as low as 0.55, with a median of 0.74.
These are just a handful of the figures considered in Ryerson and Ternium'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 RYI and TX is an impressive value stock right now.
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Should Value Investors Buy Ryerson (RYI) 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 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.
One company value investors might notice is Ryerson (RYI - Free Report) . RYI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 1.74, while its industry has an average P/E of 3.69. Over the last 12 months, RYI's Forward P/E has been as high as 12.28 and as low as 1.74, with a median of 7.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 0.13. This compares to its industry's average P/S of 0.27.
Finally, investors should note that RYI has a P/CF ratio of 1.71. 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. RYI's P/CF compares to its industry's average P/CF of 3.11. Within the past 12 months, RYI's P/CF has been as high as 7.07 and as low as -206.30, with a median of 3.92.
Investors could also keep in mind Ternium (TX - Free Report) , an Steel - Producers stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Ternium is currently trading with a Forward P/E ratio of 3.36 while its PEG ratio sits at 0.22. Both of the company's metrics compare favorably to its industry's average P/E of 3.69 and average PEG ratio of 0.28.
Over the last 12 months, TX's P/E has been as high as 5.97, as low as 2.32, with a median of 3.99, and its PEG ratio has been as high as 0.30, as low as 0.13, with a median of 0.20.
Ternium also has a P/B ratio of 0.55 compared to its industry's price-to-book ratio of 0.87. Over the past year, its P/B ratio has been as high as 1.13, as low as 0.55, with a median of 0.74.
These are just a handful of the figures considered in Ryerson and Ternium'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 RYI and TX is an impressive value stock right now.