Is Ternium S.A. (TX) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Ternium S.A. (TX). TX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 3.42, which compares to its industry's average of 4.34. Over the past year, TX's Forward P/E has been as high as 12.61 and as low as 3.40, with a median of 5.50.
TX is also sporting a PEG ratio of 0.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TX's PEG compares to its industry's average PEG of 0.31. TX's PEG has been as high as 1.65 and as low as 0.18, with a median of 0.53, all within the past year.
We should also highlight that TX has a P/B ratio of 0.88. 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 1.61. TX's P/B has been as high as 1.13 and as low as 0.48, with a median of 0.80, over the past year.
Finally, our model also underscores that TX has a P/CF ratio of 2.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.47. Within the past 12 months, TX's P/CF has been as high as 6.78 and as low as 2.53, with a median of 3.94.
Value investors will likely look at more than just these metrics, but the above data helps show that Ternium S.A. Is likely undervalued currently. And when considering the strength of its earnings outlook, TX sticks out at as one of the market's strongest value stocks.
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