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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.
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 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 Sibanye Gold Limited (SBSW - Free Report) . SBSW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.53, which compares to its industry's average of 10.88. Over the past 52 weeks, SBSW's Forward P/E has been as high as 5.67 and as low as 3.15, with a median of 4.34.
We should also highlight that SBSW has a P/B ratio of 2.32. 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. SBSW's current P/B looks attractive when compared to its industry's average P/B of 4.30. Over the past 12 months, SBSW's P/B has been as high as 3.52 and as low as 1.41, with a median of 2.02.
Teck Resources (TECK - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. TECK is a # 1 (Strong Buy) stock with a Value grade of A.
Shares of Teck Resources are currently trading at a forward earnings multiple of 7.88 and a PEG ratio of 0.20 compared to its industry's P/E and PEG ratios of 10.88 and 1.11, respectively.
TECK's Forward P/E has been as high as 12.27 and as low as 6.23, with a median of 8.59. During the same time period, its PEG ratio has been as high as 0.61, as low as 0.17, with a median of 0.26.
Teck Resources also has a P/B ratio of 1.20 compared to its industry's price-to-book ratio of 4.30. Over the past year, its P/B ratio has been as high as 1.20, as low as 0.61, with a median of 0.77.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sibanye Gold Limited and Teck Resources are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SBSW and TECK feels like a great 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.
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 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 Sibanye Gold Limited (SBSW - Free Report) . SBSW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.53, which compares to its industry's average of 10.88. Over the past 52 weeks, SBSW's Forward P/E has been as high as 5.67 and as low as 3.15, with a median of 4.34.
We should also highlight that SBSW has a P/B ratio of 2.32. 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. SBSW's current P/B looks attractive when compared to its industry's average P/B of 4.30. Over the past 12 months, SBSW's P/B has been as high as 3.52 and as low as 1.41, with a median of 2.02.
Teck Resources (TECK - Free Report) may be another strong Mining - Miscellaneous stock to add to your shortlist. TECK is a # 1 (Strong Buy) stock with a Value grade of A.
Shares of Teck Resources are currently trading at a forward earnings multiple of 7.88 and a PEG ratio of 0.20 compared to its industry's P/E and PEG ratios of 10.88 and 1.11, respectively.
TECK's Forward P/E has been as high as 12.27 and as low as 6.23, with a median of 8.59. During the same time period, its PEG ratio has been as high as 0.61, as low as 0.17, with a median of 0.26.
Teck Resources also has a P/B ratio of 1.20 compared to its industry's price-to-book ratio of 4.30. Over the past year, its P/B ratio has been as high as 1.20, as low as 0.61, with a median of 0.77.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sibanye Gold Limited and Teck Resources are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SBSW and TECK feels like a great value stock at the moment.