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Should Value Investors Buy VALE S.A. (VALE) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

VALE S.A. (VALE - Free Report) is a stock many investors are watching right now. VALE is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 4.59. This compares to its industry's average Forward P/E of 7.10. Over the past 52 weeks, VALE's Forward P/E has been as high as 9.12 and as low as 4.28, with a median of 5.93.

Finally, investors will want to recognize that VALE has a P/CF ratio of 10.54. 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 12.58. Within the past 12 months, VALE's P/CF has been as high as 25.79 and as low as 8.43, with a median of 11.30.

These are only a few of the key metrics included in VALE S.A.'s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, VALE looks like an impressive value stock at the moment.


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