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Is Cleveland-Cliffs (CLF) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 company value investors might notice is Cleveland-Cliffs (CLF). CLF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 5.23. This compares to its industry's average Forward P/E of 8.42. CLF's Forward P/E has been as high as 30.22 and as low as 4.53, with a median of 5.86, all within the past year.

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Finally, investors will want to recognize that CLF has a P/CF ratio of 7.52. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.43. CLF's P/CF has been as high as 36.89 and as low as 6.84, with a median of 19.14, all within the past year.

These are only a few of the key metrics included in Cleveland-Cliffs'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, CLF looks like an impressive value stock at the moment.


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To read this article on Zacks.com click here.