Canada Markets open in 6 hrs 41 mins

Is Legato Merger (ASTL) Stock Undervalued Right Now?

·3 min read

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Legato Merger (ASTL). ASTL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 3.26, which compares to its industry's average of 4.68. ASTL's Forward P/E has been as high as 4.33 and as low as 2.07, with a median of 3.23, all within the past year.

We should also highlight that ASTL has a P/B ratio of 1.08. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.23. Within the past 52 weeks, ASTL's P/B has been as high as 61.94 and as low as 0.33, with a median of 0.93.

Finally, investors will want to recognize that ASTL has a P/CF ratio of 2.04. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 3.49. Over the past year, ASTL's P/CF has been as high as 2.62 and as low as 1.76, with a median of 2.08.

If you're looking for another solid Steel - Producers value stock, take a look at Jfe Holdings (JFEEF). JFEEF is a # 2 (Buy) stock with a Value score of A.

Jfe Holdings also has a P/B ratio of 0.34 compared to its industry's price-to-book ratio of 1.23. Over the past year, its P/B ratio has been as high as 0.57, as low as 0.34, with a median of 0.44.

These are only a few of the key metrics included in Legato Merger and Jfe Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ASTL and JFEEF 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
 
Algoma Steel Group Inc. (ASTL) : Free Stock Analysis Report
 
Jfe Holdings Inc. (JFEEF) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.