Should Value Investors Buy SSAB (SSAAY) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 company value investors might notice is SSAB (SSAAY). SSAAY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.54, while its industry has an average P/E of 11.75. Over the past year, SSAAY's Forward P/E has been as high as 14.36 and as low as 6.79, with a median of 8.12.

Investors should also recognize that SSAAY has a P/B ratio of 0.83. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.93. Over the past year, SSAAY's P/B has been as high as 1.10 and as low as 0.57, with a median of 0.84.

Finally, our model also underscores that SSAAY has a P/CF ratio of 6.74. 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. SSAAY's current P/CF looks attractive when compared to its industry's average P/CF of 19.97. Over the past year, SSAAY's P/CF has been as high as 7.71 and as low as 3.33, with a median of 6.50.

Value investors will likely look at more than just these metrics, but the above data helps show that SSAB is likely undervalued currently. And when considering the strength of its earnings outlook, SSAAY sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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