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Is ArcelorMittal (MT) Stock Undervalued Right Now?

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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 ArcelorMittal (MT - Free Report) . MT 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 3.52, which compares to its industry's average of 5.25. MT's Forward P/E has been as high as 224.84 and as low as 3.22, with a median of 6.03, all within the past year.

Investors should also recognize that MT has a P/B ratio of 0.79. 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. MT's current P/B looks attractive when compared to its industry's average P/B of 2.13. MT's P/B has been as high as 0.82 and as low as 0.31, with a median of 0.62, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MT has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.63.

Finally, we should also recognize that MT has a P/CF ratio of 4.27. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.59. Over the past 52 weeks, MT's P/CF has been as high as 15.68 and as low as -12.35, with a median of 4.24.

These figures are just a handful of the metrics value investors tend to look at, but they help show that ArcelorMittal is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MT feels like a great value stock at the moment.


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