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Are Investors Undervaluing Ternium S.A. (TX) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company to watch right now is Ternium S.A. (TX - Free Report) . TX is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 4.11. This compares to its industry's average Forward P/E of 4.82. Over the past year, TX's Forward P/E has been as high as 12.78 and as low as 3.40, with a median of 5.63.

We also note that TX holds a PEG ratio of 0.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TX's industry currently sports an average PEG of 0.33. Over the last 12 months, TX's PEG has been as high as 1.65 and as low as 0.22, with a median of 0.55.

Another notable valuation metric for TX is its P/B ratio of 1.08. The P/B ratio pits a stock's market value against 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 1.78. Over the past 12 months, TX's P/B has been as high as 1.13 and as low as 0.46, with a median of 0.78.

Finally, investors should note that TX has a P/CF ratio of 3.53. 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 11.51. Within the past 12 months, TX's P/CF has been as high as 6.78 and as low as 2.53, with a median of 4.05.

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


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