Yahoo Finance Are Investors Undervaluing Gerdau (GGB) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Gerdau (GGB). GGB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.85, which compares to its industry's average of 10.80. Over the last 12 months, GGB's Forward P/E has been as high as 8.79 and as low as 4.98, with a median of 6.58.
Another notable valuation metric for GGB is its P/B ratio of 0.80. 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 1.71. Over the past 12 months, GGB's P/B has been as high as 1.09 and as low as 0.72, with a median of 0.84.
Finally, investors will want to recognize that GGB has a P/CF ratio of 3.74. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.22. Within the past 12 months, GGB's P/CF has been as high as 4.43 and as low as 2.86, with a median of 3.59.
Value investors will likely look at more than just these metrics, but the above data helps show that Gerdau is likely undervalued currently. And when considering the strength of its earnings outlook, GGB sticks out at as one of the market's strongest value stocks.
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Gerdau S.A. (GGB) : Free Stock Analysis Report
