Yahoo Finance Are Investors Undervaluing Schnitzer Steel Industries (SCHN) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Schnitzer Steel Industries (SCHN). SCHN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Investors should also recognize that SCHN has a P/B ratio of 0.86. The P/B ratio is used to compare a stock's market value with 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 1.29. SCHN's P/B has been as high as 1.79 and as low as 0.74, with a median of 1.01, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SCHN has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.27.
Finally, investors should note that SCHN has a P/CF ratio of 3.63. 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. SCHN's current P/CF looks attractive when compared to its industry's average P/CF of 4.19. Within the past 12 months, SCHN's P/CF has been as high as 6.83 and as low as 3.10, with a median of 4.
Investors could also keep in mind Timken Steel (TMST), an Steel - Producers stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Furthermore, Timken Steel holds a P/B ratio of 1.14 and its industry's price-to-book ratio is 1.29. TMST's P/B has been as high as 1.73, as low as 0.87, with a median of 1.14 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Schnitzer Steel Industries and Timken Steel are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SCHN and TMST feels like a great value stock at the moment.
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Schnitzer Steel Industries, Inc. (SCHN) : Free Stock Analysis Report
Timken Steel Corporation (TMST) : Free Stock Analysis Report
