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Is Olympic Steel (ZEUS) Stock Undervalued Right Now?
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Olympic Steel (ZEUS - Free Report) is a stock many investors are watching right now. ZEUS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.30, which compares to its industry's average of 38.22. Over the past year, ZEUS's Forward P/E has been as high as 5,036.97 and as low as -7,555.57, with a median of 28.51.
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. ZEUS has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.63.
Finally, investors will want to recognize that ZEUS has a P/CF ratio of 24.34. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ZEUS's current P/CF looks attractive when compared to its industry's average P/CF of 70.40. Over the past 52 weeks, ZEUS's P/CF has been as high as 24.34 and as low as 4.08, with a median of 10.30.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Olympic Steel is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ZEUS feels like a great value stock at the moment.