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Should Value Investors Buy Ryerson (RYI) Stock?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Ryerson (RYI - Free Report) is a stock many investors are watching right now. RYI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Investors should also recognize that RYI has a P/B ratio of 1.38. 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 solid versus its industry's average P/B of 1.64. Over the past year, RYI's P/B has been as high as 1.79 and as low as 0.90, with a median of 1.36.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. RYI has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.33.

Finally, our model also underscores that RYI has a P/CF ratio of 3.77. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. RYI's P/CF compares to its industry's average P/CF of 7.68. Within the past 12 months, RYI's P/CF has been as high as 4.42 and as low as 1.32, with a median of 2.14.

If you're looking for another solid Steel - Producers value stock, take a look at United States Steel (X - Free Report) . X is a # 2 (Buy) stock with a Value score of A.

United States Steel sports a P/B ratio of 0.45 as well; this compares to its industry's price-to-book ratio of 1.64. In the past 52 weeks, X's P/B has been as high as 0.69, as low as 0.39, with a median of 0.54.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ryerson and United States Steel are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RYI and X feels like a great value stock at the moment.


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