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Are These Basic Materials Stocks Undervalued 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...

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This story originally appeared on Zacks

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.

- Zacks

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 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 #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.41 right now. For comparison, its industry sports an average P/E of 9.07. Over the last 12 months, SOUHY's Forward P/E has been as high as 19.08 and as low as 5.68, with a median of 8.76.

We should also highlight that SOUHY has a P/B ratio of 1.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. SOUHY's current P/B looks attractive when compared to its industry's average P/B of 3.97. Over the past 12 months, SOUHY's P/B has been as high as 1.54 and as low as 0.96, with a median of 1.15.

Taseko Mines Limited (TGB) may be another strong Mining - Miscellaneous stock to add to your shortlist. TGB is a # 1 (Strong Buy) stock with a Value grade of A.

Taseko Mines Limited also has a P/B ratio of 2.18 compared to its industry's price-to-book ratio of 3.97. Over the past year, its P/B ratio has been as high as 3.07, as low as 1.36, with a median of 2.09.

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

 

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