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Are Investors Undervaluing Ternium S.A. (TX) 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.

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.

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 Ternium S.A. (TX - Free Report) . TX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.27, which compares to its industry's average of 21.23. Over the past 52 weeks, TX's Forward P/E has been as high as 8.76 and as low as 5.43, with a median of 6.26.

Another valuation metric that we should highlight is TX's P/B ratio of 0.56. 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 1.13. Over the past 12 months, TX's P/B has been as high as 0.85 and as low as 0.41, with a median of 0.57.

Finally, we should also recognize that TX has a P/CF ratio of 2.86. 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. TX's current P/CF looks attractive when compared to its industry's average P/CF of 8.71. Over the past year, TX's P/CF has been as high as 3.03 and as low as 1.66, with a median of 2.54.

These are just a handful of the figures considered in Ternium S.A.'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 TX is an impressive value stock right now.


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