All data are based on the daily closing price as of May 17, 2024

Are Investors Undervaluing Commercial Metals (CMC) Right Now?

South Korea
Share this on

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Commercial Metals (CMC) is a stock many investors are watching right now. CMC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.88, while its industry has an average P/E of 8.49. CMC’s Forward P/E has been as high as 9.95 and as low as 5.94, with a median of 7.99, all within the past year.

Another valuation metric that we should highlight is CMC’s P/B ratio of 1.50. The P/B ratio pits a stock’s market value against its book value, which is defined as total assets minus total liabilities. This company’s current P/B looks solid when compared to its industry’s average P/B of 1.59. Over the past 12 months, CMC’s P/B has been as high as 1.87 and as low as 1.24, with a median of 1.58.

Finally, we should also recognize that CMC has a P/CF ratio of 5.22. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 10.45. CMC’s P/CF has been as high as 5.85 and as low as 3.07, with a median of 4.48, all within the past year.

Story continues

Investors could also keep in mind POSCO (PKX), an Steel – Producers stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

POSCO is currently trading with a Forward P/E ratio of 9.61 while its PEG ratio sits at 0.53. Both of the company’s metrics compare favorably to its industry’s average P/E of 8.49 and average PEG ratio of 0.58.

PKX’s price-to-earnings ratio has been as high as 13.95 and as low as 5.14, with a median of 7.77, while its PEG ratio has been as high as 1.17 and as low as 0.49, with a median of 0.66, all within the past year.

Additionally, POSCO has a P/B ratio of 0.70 while its industry’s price-to-book ratio sits at 1.59. For PKX, this valuation metric has been as high as 0.83, as low as 0.24, with a median of 0.40 over the past year.

These are only a few of the key metrics included in Commercial Metals and POSCO strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CMC and PKX look like an impressive value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Commercial Metals Company (CMC) : Free Stock Analysis Report

POSCO (PKX) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

Share this on
Jakota Newsletter

Stay ahead in the JAKOTA stock markets with our roundup of vital insights

Icon scroll to top