Should Value Investors Buy ArcelorMittal (MT) Stock?
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.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is ArcelorMittal (MT). MT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
MT is also sporting a PEG ratio of 2.12. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MT's industry has an average PEG of 2.79 right now. MT's PEG has been as high as 2.22 and as low as 1.97, with a median of 2.06, all within the past year.
Another notable valuation metric for MT is its P/B ratio of 0.54. The P/B is a method of comparing a stock's market value to 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 1.28. MT's P/B has been as high as 0.63 and as low as 0.33, with a median of 0.46, over the past year.
Finally, we should also recognize that MT has a P/CF ratio of 2.15. 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. MT's P/CF compares to its industry's average P/CF of 2.81. MT's P/CF has been as high as 2.18 and as low as 0.95, with a median of 1.47, all within the past year.
If you're looking for another solid Steel - Producers value stock, take a look at Olympic Steel (ZEUS). ZEUS is a # 1 (Strong Buy) stock with a Value score of A.
Additionally, Olympic Steel has a P/B ratio of 1.19 while its industry's price-to-book ratio sits at 1.28. For ZEUS, this valuation metric has been as high as 1.27, as low as 0.50, with a median of 0.73 over the past year.
These are only a few of the key metrics included in ArcelorMittal and Olympic Steel strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MT and ZEUS look like an impressive value stock at the moment.
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