Should Value Investors Buy Ternium S.A. (TX) 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...
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Ternium S.A. (TX). TX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 3.53, while its industry has an average P/E of 4.47. Over the past year, TX's Forward P/E has been as high as 11.08 and as low as 3.27, with a median of 4.90.
Investors should also note that TX holds a PEG ratio of 0.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TX's PEG compares to its industry's average PEG of 0.37. Within the past year, TX's PEG has been as high as 1.58 and as low as 0.18, with a median of 0.42.
We should also highlight that TX has a P/B ratio of 0.89. 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 1.63. Over the past year, TX's P/B has been as high as 1.13 and as low as 0.48, with a median of 0.84.
Finally, our model also underscores that TX has a P/CF ratio of 2.92. 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. TX's P/CF compares to its industry's average P/CF of 10.67. Over the past year, TX's P/CF has been as high as 6.78 and as low as 2.53, with a median of 3.81.
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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