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Are Investors Undervaluing These Basic Materials Stocks Right Now?
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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.
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 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 Rio Tinto (RIO - Free Report) . RIO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.64, which compares to its industry's average of 9.52. Over the last 12 months, RIO's Forward P/E has been as high as 10.37 and as low as 4.48, with a median of 6.55.
Another valuation metric that we should highlight is RIO's P/B ratio of 1.62. Investors use the P/B ratio to look at a stock's market value versus 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 3.99. RIO's P/B has been as high as 2.28 and as low as 1.28, with a median of 1.67, over the past year.
Sibanye Gold Limited (SBSW - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. SBSW is a # 2 (Buy) stock with a Value grade of A.
Furthermore, Sibanye Gold Limited holds a P/B ratio of 2.10 and its industry's price-to-book ratio is 3.99. SBSW's P/B has been as high as 3.52, as low as 1.41, with a median of 2.02 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 Rio Tinto and Sibanye Gold Limited are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO and SBSW feels like a great value stock at the moment.
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Are Investors Undervaluing These Basic Materials Stocks Right Now?
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.
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 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 Rio Tinto (RIO - Free Report) . RIO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.64, which compares to its industry's average of 9.52. Over the last 12 months, RIO's Forward P/E has been as high as 10.37 and as low as 4.48, with a median of 6.55.
Another valuation metric that we should highlight is RIO's P/B ratio of 1.62. Investors use the P/B ratio to look at a stock's market value versus 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 3.99. RIO's P/B has been as high as 2.28 and as low as 1.28, with a median of 1.67, over the past year.
Sibanye Gold Limited (SBSW - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. SBSW is a # 2 (Buy) stock with a Value grade of A.
Furthermore, Sibanye Gold Limited holds a P/B ratio of 2.10 and its industry's price-to-book ratio is 3.99. SBSW's P/B has been as high as 3.52, as low as 1.41, with a median of 2.02 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 Rio Tinto and Sibanye Gold Limited are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO and SBSW feels like a great value stock at the moment.