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Is VALE S.A. (VALE) Stock Undervalued Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

VALE S.A. (VALE - Free Report) is a stock many investors are watching right now. VALE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.14, which compares to its industry's average of 9.30. Over the last 12 months, VALE's Forward P/E has been as high as 12.22 and as low as 7.94, with a median of 9.55.

Another notable valuation metric for VALE is its P/B ratio of 1.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. VALE's current P/B looks attractive when compared to its industry's average P/B of 1.86. Over the past year, VALE's P/B has been as high as 1.90 and as low as 1.10, with a median of 1.54.

Finally, investors will want to recognize that VALE has a P/CF ratio of 8.44. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. VALE's P/CF compares to its industry's average P/CF of 8.64. Over the past 52 weeks, VALE's P/CF has been as high as 9.50 and as low as 5.80, with a median of 7.44.

These are just a handful of the figures considered in VALE 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 VALE is an impressive value stock right now.


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