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Is Posco (PKX) a Great Value Stock 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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Posco (PKX - Free Report) is a stock many investors are watching right now. PKX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that PKX has a P/B ratio of 0.57. 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 attractive against its industry's average P/B of 0.91. Over the past year, PKX's P/B has been as high as 0.61 and as low as 0.24, with a median of 0.38.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PKX has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.45.

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


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