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Are Investors Undervaluing Sasol (SSL) Right Now?

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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Sasol (SSL - Free Report) . SSL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.10, while its industry has an average P/E of 15.28. SSL's Forward P/E has been as high as 23.34 and as low as 0.72, with a median of 7.45, all within the past year.

Investors should also note that SSL holds a PEG ratio of 1.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SSL's PEG compares to its industry's average PEG of 2.20. Within the past year, SSL's PEG has been as high as 2.08 and as low as 0.16, with a median of 1.59.

These are only a few of the key metrics included in Sasol'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, SSL looks like an impressive value stock at the moment.


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