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Should Value Investors Buy ArcelorMittal (MT) Stock?

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.

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 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 stock to keep an eye on is ArcelorMittal (MT). MT is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 5.59, while its industry has an average P/E of 6.80. MT's Forward P/E has been as high as 11.33 and as low as 5.28, with a median of 8.60, all within the past year.

Another valuation metric that we should highlight is MT's P/B ratio of 0.75. 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 stock's P/B looks attractive against its industry's average P/B of 1.49. Over the past year, MT's P/B has been as high as 0.93 and as low as 0.68, with a median of 0.79.

Finally, our model also underscores that MT has a P/CF ratio of 3.86. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.80. Over the past 52 weeks, MT's P/CF has been as high as 5.21 and as low as 3.51, with a median of 4.46.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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