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Are Investors Undervaluing Commercial Metals (CMC) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

One stock to keep an eye on is Commercial Metals (CMC - Free Report) . CMC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Investors should also recognize that CMC has a P/B ratio of 1.70. 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 1.89. Within the past 52 weeks, CMC's P/B has been as high as 1.98 and as low as 1.19, with a median of 1.38.

Finally, investors will want to recognize that CMC has a P/CF ratio of 7.75. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.01. Over the past 52 weeks, CMC's P/CF has been as high as 9.75 and as low as 5.39, with a median of 6.27.

Value investors will likely look at more than just these metrics, but the above data helps show that Commercial Metals is likely undervalued currently. And when considering the strength of its earnings outlook, CMC sticks out at as one of the market's strongest value stocks.


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