Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Nexa Resources S.A. (NEXA) or Anglo American (NGLOY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Nexa Resources S.A. has a Zacks Rank of #2 (Buy), while Anglo American has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NEXA is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NEXA currently has a forward P/E ratio of 7.44, while NGLOY has a forward P/E of 23.92. We also note that NEXA has a PEG ratio of 0.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NGLOY currently has a PEG ratio of 0.55.
Another notable valuation metric for NEXA is its P/B ratio of 1.59. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NGLOY has a P/B of 2.35.
Based on these metrics and many more, NEXA holds a Value grade of A, while NGLOY has a Value grade of C.
NEXA stands above NGLOY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NEXA is the superior value option right now.
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Anglo American (NGLOY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
