Back to top

Is Reliance Steel (RS) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One company to watch right now is Reliance Steel (RS - Free Report) . RS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.88. This compares to its industry's average Forward P/E of 10.73. RS's Forward P/E has been as high as 17.02 and as low as 9.49, with a median of 12.73, all within the past year.

Investors should also recognize that RS has a P/B ratio of 1.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.34. RS's P/B has been as high as 1.47 and as low as 1.19, with a median of 1.32, over the past year.

Finally, we should also recognize that RS has a P/CF ratio of 6.40. 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. RS's current P/CF looks attractive when compared to its industry's average P/CF of 9.40. Over the past year, RS's P/CF has been as high as 10.81 and as low as 6.18, with a median of 7.91.

These are only a few of the key metrics included in Reliance Steel'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, RS 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:

Reliance Steel & Aluminum Co. (RS) - free report >>

More from Zacks Tale of the Tape

You May Like