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Should Value Investors Buy These Basic Materials Stocks?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Sibanye Gold Limited (SBSW - Free Report) . SBSW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 4.49, which compares to its industry's average of 9.16. Over the past year, SBSW's Forward P/E has been as high as 5.54 and as low as 3.15, with a median of 4.27.
Another valuation metric that we should highlight is SBSW's P/B ratio of 1.80. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SBSW's current P/B looks attractive when compared to its industry's average P/B of 3.79. Over the past year, SBSW's P/B has been as high as 3.52 and as low as 1.41, with a median of 2.09.
Investors could also keep in mind Teck Resources (TECK - Free Report) , an Mining - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Teck Resources are currently trading at a forward earnings multiple of 7.05 and a PEG ratio of 0.19 compared to its industry's P/E and PEG ratios of 9.16 and 1.09, respectively.
Over the last 12 months, TECK's P/E has been as high as 14.95, as low as 6.23, with a median of 8.99, and its PEG ratio has been as high as 11.68, as low as 0.17, with a median of 0.43.
Teck Resources sports a P/B ratio of 0.92 as well; this compares to its industry's price-to-book ratio of 3.79. In the past 52 weeks, TECK's P/B has been as high as 1.03, as low as 0.61, with a median of 0.75.
These are only a few of the key metrics included in Sibanye Gold Limited and Teck Resources strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SBSW and TECK look like an impressive value stock at the moment.
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Should Value Investors Buy These Basic Materials Stocks?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Sibanye Gold Limited (SBSW - Free Report) . SBSW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 4.49, which compares to its industry's average of 9.16. Over the past year, SBSW's Forward P/E has been as high as 5.54 and as low as 3.15, with a median of 4.27.
Another valuation metric that we should highlight is SBSW's P/B ratio of 1.80. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SBSW's current P/B looks attractive when compared to its industry's average P/B of 3.79. Over the past year, SBSW's P/B has been as high as 3.52 and as low as 1.41, with a median of 2.09.
Investors could also keep in mind Teck Resources (TECK - Free Report) , an Mining - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Teck Resources are currently trading at a forward earnings multiple of 7.05 and a PEG ratio of 0.19 compared to its industry's P/E and PEG ratios of 9.16 and 1.09, respectively.
Over the last 12 months, TECK's P/E has been as high as 14.95, as low as 6.23, with a median of 8.99, and its PEG ratio has been as high as 11.68, as low as 0.17, with a median of 0.43.
Teck Resources sports a P/B ratio of 0.92 as well; this compares to its industry's price-to-book ratio of 3.79. In the past 52 weeks, TECK's P/B has been as high as 1.03, as low as 0.61, with a median of 0.75.
These are only a few of the key metrics included in Sibanye Gold Limited and Teck Resources strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SBSW and TECK look like an impressive value stock at the moment.