Back to top

Should Value Investors Buy VALE S.A. (VALE) Stock?

Read MoreHide Full Article

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.

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.

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.

VALE S.A. (VALE - Free Report) is a stock many investors are watching right now. VALE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.67. This compares to its industry's average Forward P/E of 8.69. VALE's Forward P/E has been as high as 12.22 and as low as 8.09, with a median of 9.68, all within the past year.

Another valuation metric that we should highlight is VALE's P/B ratio of 1.55. 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. VALE's current P/B looks attractive when compared to its industry's average P/B of 1.66. VALE's P/B has been as high as 1.72 and as low as 1.10, with a median of 1.48, over the past year.

Finally, we should also recognize that VALE has a P/CF ratio of 7.68. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.70. VALE's P/CF has been as high as 9.86 and as low as 5.80, with a median of 7.45, all within the past year.

These are only a few of the key metrics included in VALE S.A.'s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, VALE looks like an impressive value stock at the moment.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


VALE S.A. (VALE) - free report >>

More from Zacks Tale of the Tape

You May Like