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Are Investors Undervaluing Ternium S.A. (TX) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 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 stock to keep an eye on is Ternium S.A. (TX). TX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 3.93 right now. For comparison, its industry sports an average P/E of 6.46. Over the last 12 months, TX's Forward P/E has been as high as 19.35 and as low as 3.86, with a median of 10.03.

Investors should also note that TX holds a PEG ratio of 0.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TX's industry currently sports an average PEG of 0.42. Within the past year, TX's PEG has been as high as 5.14 and as low as 0.29, with a median of 0.93.

Another notable valuation metric for TX is its P/B ratio of 0.87. The P/B ratio is used to compare a stock's market value with 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 2.24. Over the past 12 months, TX's P/B has been as high as 0.91 and as low as 0.33, with a median of 0.60.

Finally, we should also recognize that TX has a P/CF ratio of 3.87. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.28. Within the past 12 months, TX's P/CF has been as high as 6.78 and as low as 2.44, with a median of 4.09.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ternium S.A. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TX feels like a great value stock at the moment.


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