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Is Siderurgica Nacional (SID) Stock Undervalued Right Now?

Zacks Equity Research

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Siderurgica Nacional (SID). SID is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.42, while its industry has an average P/E of 13.56. Over the past year, SID's Forward P/E has been as high as 20.84 and as low as 5.20, with a median of 13.33.

Another notable valuation metric for SID is its P/B ratio of 1.60. 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 stock's P/B looks solid versus its industry's average P/B of 2.61. Over the past year, SID's P/B has been as high as 2.33 and as low as 1.09, with a median of 1.67.

Finally, we should also recognize that SID has a P/CF ratio of 3.91. 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 stock's P/CF looks attractive against its industry's average P/CF of 5.66. SID's P/CF has been as high as 4.99 and as low as 1.73, with a median of 3.23, all within the past year.

These are just a handful of the figures considered in Siderurgica Nacional's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SID is an impressive value stock right now.


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