Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Schnitzer Steel Industries, Inc. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for SCHN’s status as a solid value stock below:
Price to Forward Sales for Schnitzer Steel
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 0.46, SCHN investors are paying 46 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 0.54, and it is safe to say that SCHN is undervalued compared to many of its peers on this important metric.
SCHNITZER STEEL Price and Consensus
Price/Cash Flow for Schnitzer Steel Stock
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for SCHN comes in at 5.56, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 5.68, so Schnitzer Steel has its peers beat in this regard too.
SCHN Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow SCHN stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Schnitzer Steel now.
Over the past 30 days, two earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that one estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago SCHN was expected to post earnings of $1.08 per share for the full year though today it looks to have EPS of $1.25 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have SCHN as a stock with a Value Score of ‘A’ and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
So if you are a value investor, definitely keep SCHN on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
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3 Reasons Why Schnitzer Steel (SCHN) is a Great Value Stock
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Schnitzer Steel Industries, Inc. as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for SCHN’s status as a solid value stock below:
Price to Forward Sales for Schnitzer Steel
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 0.46, SCHN investors are paying 46 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 0.54, and it is safe to say that SCHN is undervalued compared to many of its peers on this important metric.
SCHNITZER STEEL Price and Consensus
SCHNITZER STEEL Price and Consensus | SCHNITZER STEEL Quote
Price/Cash Flow for Schnitzer Steel Stock
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for SCHN comes in at 5.56, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 5.68, so Schnitzer Steel has its peers beat in this regard too.
SCHN Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow SCHN stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Schnitzer Steel now.
Over the past 30 days, two earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that one estimate has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago SCHN was expected to post earnings of $1.08 per share for the full year though today it looks to have EPS of $1.25 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have SCHN as a stock with a Value Score of ‘A’ and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
So if you are a value investor, definitely keep SCHN on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>