Should Value Investors Buy These Basic Materials Stocks?

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is South32 (SOUHY). SOUHY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.12 right now. For comparison, its industry sports an average P/E of 8.95. Over the past 52 weeks, SOUHY's Forward P/E has been as high as 19.08 and as low as 5.68, with a median of 10.33.

Investors should also recognize that SOUHY has a P/B ratio of 1.37. The P/B ratio pits a stock's market value against 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 3.79. Over the past 12 months, SOUHY's P/B has been as high as 1.54 and as low as 0.95, with a median of 1.13.

Taseko Mines Limited (TGB) may be another strong Mining - Miscellaneous stock to add to your shortlist. TGB is a # 2 (Buy) stock with a Value grade of A.

Taseko Mines Limited sports a P/B ratio of 2.23 as well; this compares to its industry's price-to-book ratio of 3.79. In the past 52 weeks, TGB's P/B has been as high as 3.07, as low as 1.21, with a median of 2.06.

These are only a few of the key metrics included in South32 and Taseko Mines Limited strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SOUHY and TGB look like an impressive value stock at the moment.

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South32 Ltd. (SOUHY) : Free Stock Analysis Report
 
Taseko Mines Limited (TGB) : Free Stock Analysis Report
 
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