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Should Value Investors Buy Gerdau (GGB) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 value investors might notice is Gerdau (GGB - Free Report) . GGB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.29. This compares to its industry's average Forward P/E of 9.80. Over the last 12 months, GGB's Forward P/E has been as high as 8.81 and as low as 4.98, with a median of 6.70.

We should also highlight that GGB has a P/B ratio of 0.75. The P/B ratio is used to compare a stock's market value with 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 1.60. GGB's P/B has been as high as 1.09 and as low as 0.70, with a median of 0.79, over the past year.

Finally, we should also recognize that GGB has a P/CF ratio of 4.11. 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 15.83. Within the past 12 months, GGB's P/CF has been as high as 4.47 and as low as 2.91, with a median of 3.66.

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

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