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Is Ternium S.A. (TX) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Ternium S.A. (TX - Free Report) is a stock many investors are watching right now. TX 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 15.01. This compares to its industry's average Forward P/E of 16.86. TX's Forward P/E has been as high as 19.35 and as low as 3.97, with a median of 7.93, all within the past year.

Another valuation metric that we should highlight is TX's P/B ratio of 0.39. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.13. Over the past year, TX's P/B has been as high as 0.60 and as low as 0.25, with a median of 0.49.

Finally, investors should note that TX has a P/CF ratio of 2.83. 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 52 weeks, TX's P/CF has been as high as 3.76 and as low as 1.58, with a median of 2.56.

Value investors will likely look at more than just these metrics, but the above data helps show that Ternium S.A. Is likely undervalued currently. And when considering the strength of its earnings outlook, TX sticks out at as one of the market's strongest value stocks.


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