Back to top

Image: Bigstock

Is Cleveland-Cliffs (CLF) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 to watch right now is Cleveland-Cliffs (CLF - Free Report) . CLF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that CLF has a P/B ratio of 1.84. The P/B ratio is used to compare a stock's market value with 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 3.36. CLF's P/B has been as high as 10.57 and as low as 1.12, with a median of 5.40, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLF has a P/S ratio of 0.81. This compares to its industry's average P/S of 1.92.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Cleveland-Cliffs is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLF feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


ClevelandCliffs Inc. (CLF) - free report >>

Published in