Are Investors Undervaluing Ternium (TX) Right Now?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Ternium (TX). TX is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.84 right now. For comparison, its industry sports an average P/E of 9.14. Over the last 12 months, TX's Forward P/E has been as high as 12.43 and as low as 4.84, with a median of 6.46.
Finally, investors should note that TX has a P/CF ratio of 8.19. 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 P/CF compares to its industry's average P/CF of 10.50. Over the past year, TX's P/CF has been as high as 9.15 and as low as 3, with a median of 4.33.
Investors could also keep in mind United States Steel (X), an Steel - Producers stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Additionally, United States Steel has a P/B ratio of 0.95 while its industry's price-to-book ratio sits at 1.55. For X, this valuation metric has been as high as 1, as low as 0.45, with a median of 0.62 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Ternium and United States Steel are likely undervalued currently. And when considering the strength of its earnings outlook, TX and X sticks out as one of the market's strongest value stocks.
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Ternium S.A. (TX) : Free Stock Analysis Report
United States Steel Corporation (X) : Free Stock Analysis Report
