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Is TimkenSteel (TMST) Stock Undervalued Right Now?

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  • TMST

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.

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.

TimkenSteel (TMST) is a stock many investors are watching right now. TMST is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 4.75, while its industry has an average P/E of 4.86. Over the past year, TMST's Forward P/E has been as high as 27.61 and as low as -78.75, with a median of 4.90.

Investors should also recognize that TMST has a P/B ratio of 1.07. 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. TMST's current P/B looks attractive when compared to its industry's average P/B of 1.80. Over the past year, TMST's P/B has been as high as 1.42 and as low as 0.30, with a median of 0.85.

Finally, investors should note that TMST has a P/CF ratio of 6.95. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TMST's P/CF compares to its industry's average P/CF of 11.63. Over the past 52 weeks, TMST's P/CF has been as high as 40.35 and as low as -5.28, with a median of 8.78.

These are only a few of the key metrics included in TimkenSteel's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TMST looks like an impressive value stock at the moment.

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