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Are Investors Undervaluing Rio Tinto (RIO) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is Rio Tinto (RIO - Free Report) . RIO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.99 right now. For comparison, its industry sports an average P/E of 14.09. Over the last 12 months, RIO's Forward P/E has been as high as 10.78 and as low as 8.49, with a median of 9.64.
RIO is also sporting a PEG ratio of 0.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RIO's industry currently sports an average PEG of 0.92. Over the past 52 weeks, RIO's PEG has been as high as 0.43 and as low as 0.35, with a median of 0.39.
Another valuation metric that we should highlight is RIO's P/B ratio of 1.26. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RIO's current P/B looks attractive when compared to its industry's average P/B of 1.69. Within the past 52 weeks, RIO's P/B has been as high as 1.56 and as low as 1.13, with a median of 1.31.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rio Tinto is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO feels like a great value stock at the moment.
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Are Investors Undervaluing Rio Tinto (RIO) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is Rio Tinto (RIO - Free Report) . RIO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.99 right now. For comparison, its industry sports an average P/E of 14.09. Over the last 12 months, RIO's Forward P/E has been as high as 10.78 and as low as 8.49, with a median of 9.64.
RIO is also sporting a PEG ratio of 0.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RIO's industry currently sports an average PEG of 0.92. Over the past 52 weeks, RIO's PEG has been as high as 0.43 and as low as 0.35, with a median of 0.39.
Another valuation metric that we should highlight is RIO's P/B ratio of 1.26. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RIO's current P/B looks attractive when compared to its industry's average P/B of 1.69. Within the past 52 weeks, RIO's P/B has been as high as 1.56 and as low as 1.13, with a median of 1.31.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rio Tinto is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO feels like a great value stock at the moment.