Yahoo Finance Should Value Investors Buy Schnitzer Steel Industries (SCHN) 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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Schnitzer Steel Industries (SCHN) is a stock many investors are watching right now. SCHN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another notable valuation metric for SCHN is its P/B ratio of 0.85. 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. SCHN's current P/B looks attractive when compared to its industry's average P/B of 1.56. SCHN's P/B has been as high as 1.79 and as low as 0.74, with a median of 0.97, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SCHN has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.29.
Finally, investors will want to recognize that SCHN has a P/CF ratio of 4.42. 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 4.52. Over the past year, SCHN's P/CF has been as high as 6.83 and as low as 3.10, with a median of 4.35.
Olympic Steel (ZEUS) may be another strong Steel - Producers stock to add to your shortlist. ZEUS is a # 1 (Strong Buy) stock with a Value grade of A.
Additionally, Olympic Steel has a P/B ratio of 1.08 while its industry's price-to-book ratio sits at 1.56. For ZEUS, this valuation metric has been as high as 1.27, as low as 0.50, with a median of 0.73 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Schnitzer Steel Industries and Olympic Steel are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SCHN and ZEUS feels like a great value stock at the moment.
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Schnitzer Steel Industries, Inc. (SCHN) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
