Are Investors Undervaluing Teck Resources Ltd (TECK) 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. 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Teck Resources Ltd (TECK). TECK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another notable valuation metric for TECK is its P/B ratio of 0.83. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.07. Over the past year, TECK's P/B has been as high as 0.89 and as low as 0.40, with a median of 0.70.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TECK has a P/S ratio of 1.64. This compares to its industry's average P/S of 2.27.
Finally, investors should note that TECK has a P/CF ratio of 7.62. 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 12.93. Within the past 12 months, TECK's P/CF has been as high as 60.18 and as low as 6.70, with a median of 12.99.
Value investors will likely look at more than just these metrics, but the above data helps show that Teck Resources Ltd is likely undervalued currently. And when considering the strength of its earnings outlook, TECK sticks out at as one of the market's strongest value stocks.
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