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Are Investors Undervaluing Posco (PKX) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 to watch right now is Posco (PKX - Free Report) . PKX is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 6.19 right now. For comparison, its industry sports an average P/E of 6.23. Over the past year, PKX's Forward P/E has been as high as 10.30 and as low as 6.02, with a median of 8.38.

Investors should also recognize that PKX has a P/B ratio of 0.48. The P/B ratio pits a stock's market value against 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 1.36. Over the past 12 months, PKX's P/B has been as high as 0.70 and as low as 0.46, with a median of 0.59.

Finally, our model also underscores that PKX has a P/CF ratio of 3.61. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.41. Over the past year, PKX's P/CF has been as high as 5.45 and as low as 0.87, with a median of 4.45.

These are just a handful of the figures considered in Posco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PKX is an impressive value stock right now.


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