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Are Investors Undervaluing Cleveland-Cliffs (CLF) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Cleveland-Cliffs (CLF - Free Report) . CLF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 4.98, while its industry has an average P/E of 11.35. CLF's Forward P/E has been as high as 184.70 and as low as -4,433.51, with a median of 13.77, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CLF has a P/S ratio of 1.73. This compares to its industry's average P/S of 3.64.

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.


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