Yahoo Finance ARREF or FCX: Which Is the Better Value Stock Right Now?
Investors with an interest in Mining - Non Ferrous stocks have likely encountered both Amerigo Resources (ARREF) and Freeport-McMoRan (FCX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Amerigo Resources is sporting a Zacks Rank of #2 (Buy), while Freeport-McMoRan has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ARREF likely has seen a stronger improvement to its earnings outlook than FCX has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ARREF currently has a forward P/E ratio of 7.88, while FCX has a forward P/E of 29.99. We also note that ARREF has a PEG ratio of 0.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FCX currently has a PEG ratio of 8.09.
Another notable valuation metric for ARREF is its P/B ratio of 1.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FCX has a P/B of 2.55.
These metrics, and several others, help ARREF earn a Value grade of A, while FCX has been given a Value grade of D.
ARREF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ARREF is likely the superior value option right now.
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
Amerigo Resources Ltd. (ARREF) : Free Stock Analysis Report
Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
