Monday, October 25, 2021

Are Investors Undervaluing Siderurgica Nacional (SID) Right Now?

Zacks Equity ResearchJuly

In this article:

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.

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.

Siderurgica Nacional (SID) is a stock many investors are watching right now. SID is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 3.18, which compares to its industry’s average of 5.50. SID’s Forward P/E has been as high as 14.12 and as low as 3.03, with a median of 8.12, all within the past year.

Investors will also notice that SID has a PEG ratio of 0.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. SID’s PEG compares to its industry’s average PEG of 0.39. SID’s PEG has been as high as 0.48 and as low as 0.13, with a median of 0.17, all within the past year.

Finally, investors will want to recognize that SID has a P/CF ratio of 4.64. 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. SID’s current P/CF looks attractive when compared to its industry’s average P/CF of 11.06. Over the past 52 weeks, SID’s P/CF has been as high as 156.17 and as low as 3.48, with a median of 7.61.

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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