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Should Value Investors Buy These Industrial Products Stocks?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is Mitsui & Co. (MITSY - Free Report) . MITSY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.70, which compares to its industry's average of 9.74. Over the past year, MITSY's Forward P/E has been as high as 12.97 and as low as 5.03, with a median of 6.74.
Another valuation metric that we should highlight is MITSY's P/B ratio of 0.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MITSY's current P/B looks attractive when compared to its industry's average P/B of 2.29. Over the past year, MITSY's P/B has been as high as 0.91 and as low as 0.74, with a median of 0.83.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MITSY has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.65.
Finally, we should also recognize that MITSY has a P/CF ratio of 5.68. 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. MITSY's current P/CF looks attractive when compared to its industry's average P/CF of 16.29. Within the past 12 months, MITSY's P/CF has been as high as 7.49 and as low as 4.89, with a median of 5.61.
Reliance Steel & Aluminum Co. (RS - Free Report) may be another strong Metal Products - Distribution stock to add to your shortlist. RS is a # 2 (Buy) stock with a Value grade of A.
RS's price-to-earnings ratio has been as high as 16.19 and as low as 7.89, with a median of 11.21, while its PEG ratio has been as high as 1.80 and as low as 1.21, with a median of 1.59, all within the past year.
Furthermore, Reliance Steel & Aluminum Co. holds a P/B ratio of 1.63 and its industry's price-to-book ratio is 2.29. RS's P/B has been as high as 2.11, as low as 1.44, with a median of 1.72 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Mitsui & Co. and Reliance Steel & Aluminum Co. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MITSY and RS feels like a great value stock at the moment.
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Should Value Investors Buy These Industrial Products Stocks?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is Mitsui & Co. (MITSY - Free Report) . MITSY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.70, which compares to its industry's average of 9.74. Over the past year, MITSY's Forward P/E has been as high as 12.97 and as low as 5.03, with a median of 6.74.
Another valuation metric that we should highlight is MITSY's P/B ratio of 0.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MITSY's current P/B looks attractive when compared to its industry's average P/B of 2.29. Over the past year, MITSY's P/B has been as high as 0.91 and as low as 0.74, with a median of 0.83.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MITSY has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.65.
Finally, we should also recognize that MITSY has a P/CF ratio of 5.68. 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. MITSY's current P/CF looks attractive when compared to its industry's average P/CF of 16.29. Within the past 12 months, MITSY's P/CF has been as high as 7.49 and as low as 4.89, with a median of 5.61.
Reliance Steel & Aluminum Co. (RS - Free Report) may be another strong Metal Products - Distribution stock to add to your shortlist. RS is a # 2 (Buy) stock with a Value grade of A.
RS's price-to-earnings ratio has been as high as 16.19 and as low as 7.89, with a median of 11.21, while its PEG ratio has been as high as 1.80 and as low as 1.21, with a median of 1.59, all within the past year.
Furthermore, Reliance Steel & Aluminum Co. holds a P/B ratio of 1.63 and its industry's price-to-book ratio is 2.29. RS's P/B has been as high as 2.11, as low as 1.44, with a median of 1.72 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Mitsui & Co. and Reliance Steel & Aluminum Co. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MITSY and RS feels like a great value stock at the moment.