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Should Value Investors Buy Gerdau (GGB) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 Gerdau (GGB - Free Report) . GGB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.29 right now. For comparison, its industry sports an average P/E of 7.82. GGB's Forward P/E has been as high as 7.89 and as low as 3.45, with a median of 5.59, all within the past year.

Another notable valuation metric for GGB is its P/B ratio of 0.95. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. GGB's current P/B looks attractive when compared to its industry's average P/B of 1.60. Within the past 52 weeks, GGB's P/B has been as high as 1.37 and as low as 0.72, with a median of 1.01.

Finally, our model also underscores that GGB has a P/CF ratio of 1.95. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 5.24. Over the past 52 weeks, GGB's P/CF has been as high as 3.26 and as low as 1.88, with a median of 2.42.

Another great Steel - Producers stock you could consider is Usinas Siderurgicas de Minas Gerais (USNZY - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.

USNZY's price-to-earnings ratio has been as high as 15.30 and as low as 2.68, with a median of 5.26, while its PEG ratio has been as high as 0.75 and as low as 0.16, with a median of 0.26, all within the past year.

Additionally, Usinas Siderurgicas de Minas Gerais has a P/B ratio of 0.15 while its industry's price-to-book ratio sits at 1.60. For USNZY, this valuation metric has been as high as 0.32, as low as 0.13, with a median of 0.16 over the past year.

These are just a handful of the figures considered in Gerdau and Usinas Siderurgicas de Minas Gerais's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GGB and USNZY is an impressive value stock right now.


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Gerdau S.A. (GGB) - free report >>

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