Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Metals & Mining - Iron & Steel industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Metals & Mining - Iron & Steel Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Metals & Mining - Iron & Steel Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Metals & Mining - Iron & Steel industry for Tuesday, July 09, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Metals & Mining - Iron & Steel industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Cleveland-Cliffs Inc’s Value Grade

Value Grade:

Cleveland-Cliffs Inc. is a flat-rolled steel producer and engaged in manufacturing iron ore pellets in North America. The Company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. It offers advanced high-strength steels (AHSS), hot-dipped galvanized, aluminized, galvalume, electrogalvanized, galvanneal, hot-rolled coil (HRC), cold-rolled coil, plate, tinplate, grain oriented electrical steel (GOES), non-oriented electrical steel (NOES), stainless steels, tool and die, stamped components, rail, slab and cast ingot. Its tubular components and tooling and stamping segments provide carbon and stainless steel tubing products, advanced-engineered solutions, tool design and build, hot and cold stamped steel components and complex assemblies. It serves various markets, such as automotive, infrastructure and manufacturing, steel producers, and distributors and converters.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cleveland-Cliffs Inc has a Value Score of 87, which is considered to be undervalued.

When you look at Cleveland-Cliffs Inc’s price-to-sales ratio at 0.35 compared to the industry median at 0.53, this company has a lower price relative to revenue compared to its peers. This could make Cleveland-Cliffs Inc’s stock more attractive for value investors.

Cleveland-Cliffs Inc’s price-earnings ratio is 20.63 compared to the industry median at 11.44. This means it has a higher share price relative to earnings compared to its peers. This could make Cleveland-Cliffs Inc less attractive for value investors.

Now, let’s assess Cleveland-Cliffs Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 7.9, when compared to the industry median of 7.3, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Cleveland-Cliffs Inc’s shareholder yield is higher than its industry median ratio of 1.94%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Cleveland-Cliffs Inc’s price-to-book ratio is lower than its industry median ratio of 1.08. This could make Cleveland-Cliffs Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.75. This could make Cleveland-Cliffs Inc more attractive because the lower P/FCF ratio indicates that Cleveland-Cliffs Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Ramaco Resources Inc’s Value Grade

Value Grade:

Ramaco Resources, Inc. is a metallurgical coal company. The Company operates and develops metallurgical coal in southern West Virginia and southwestern Virginia. Its development portfolio primarily includes four properties: Elk Creek, Berwind, Knox Creek, and Maben. Its operations include six active mines at its Elk Creek mining complex, three active mines at its Berwind mining complex, two active mines at its Knox Creek mining complex, and one active mine at its Maben mining complex. The Elk Creek property consists of approximately 20,200 acres of controlled mineral rights and contains approximately 16 seams that it has targeted for production. The Berwind property consists of approximately 62,500 acres of controlled mineral rights. The Knox Creek Complex includes a preparation plant and 64,050 acres of controlled mineral rights. The Maben property is located in southern West Virginia and consists of approximately 28,000 acres of controlled mineral rights.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Ramaco Resources Inc has a Value Score of 63, which is considered to be undervalued.

Ramaco Resources Inc’s price-earnings ratio is 8.8 compared to the industry median at 11.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Ramaco Resources Inc more attractive for value investors.

Ramaco Resources Inc’s price-to-book ratio is lower than its peers. This could make Ramaco Resources Inc more attractive for value investors when compared to the industry median at 1.08.

You can read more about Ramaco Resources Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Nippon Steel Corp - ADR’s Value Grade

Value Grade:

Nippon Steel Corp is a Japan-based company mainly engaged in the steel manufacturing business, engineering business, chemical & material business and system solution business. The Company operates through four business segments. The Steel Manufacturing segment is engaged in the manufacture and sale of steel bars, steel plates, steel pipes, special steels, steel secondary products and other steel products. The Engineering segment is engaged in the production and sale of industrial equipment and steel structures, the contract of construction work, the processing and recycling of waste, as well as the provision of electricity, gas and heat. The Chemical and Materials segment is engaged in the manufacture and sale of coal chemical products, petrochemical products, electronic materials, carbon fibers, composites and other products. The System Solution segment is engaged in the provision of computer system related engineering consulting services and outsourcing services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Nippon Steel Corp - ADR has a Value Score of 95, which is considered to be undervalued.

Nippon Steel Corp - ADR’s price-earnings ratio is 6.3 compared to the industry median at 11.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Nippon Steel Corp - ADR more attractive for value investors.

Nippon Steel Corp - ADR’s price-to-book ratio is higher than its peers. This could make Nippon Steel Corp - ADR less attractive for value investors when compared to the industry median at 1.08.

You can read more about Nippon Steel Corp - ADR’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Plaintree Systems Inc. (USA)’s Value Grade

Value Grade:

Plaintree Systems Inc. is a Canada-based diversified company with technologies and manufacturing capabilities in structural design and aerospace. Its segments include Applied Electronics and Specialty Structures. The Applied Electronics division includes Hypernetics, Summit Aerospace USA Inc. and Elmira Stove Works Inc. businesses. The Applied Electronics segment is a manufacturer of avionic components for various applications, including aircraft antiskid braking, aircraft instrument indicators, solenoids, high purity valves and permanent magnet alternators. The Specialty Structures segment is engaged in designing/building and manufacturing of steel, aluminum and stainless-steel specialty structures, such as commercial domes, foundations for unstable soil conditions and flood zones, for free form structures, barrel vaults, space frames and industrial dome coverings, and Spotton Corporation, a design and manufacturer of high-end custom hydraulic and pneumatic valves and cylinders.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Plaintree Systems Inc. (USA) has a Value Score of 80, which is considered to be undervalued.

Plaintree Systems Inc. (USA)’s price-to-book ratio is lower than its peers. This could make Plaintree Systems Inc. (USA) more attractive for value investors when compared to the industry median at 1.08.

You can read more about Plaintree Systems Inc. (USA)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Companhia Siderurgica Nacional SA (ADR)’s Value Grade

Value Grade:

Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers, and galvanized steel, with operations in Brazil, the United States, Portugal, and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution, and sale operations. The logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Companhia Siderurgica Nacional SA (ADR) has a Value Score of 74, which is considered to be undervalued.

Companhia Siderurgica Nacional SA (ADR)’s price-earnings ratio is 933.3 compared to the industry median at 11.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Companhia Siderurgica Nacional SA (ADR) less attractive for value investors.

Companhia Siderurgica Nacional SA (ADR)’s price-to-book ratio is higher than its peers. This could make Companhia Siderurgica Nacional SA (ADR) less attractive for value investors when compared to the industry median at 1.08.

You can read more about Companhia Siderurgica Nacional SA (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Steel Dynamics Inc’s Value Grade

Value Grade:

Steel Dynamics, Inc. is a steel producer and metal recycler in the North America. Its segments include Steel Operations, Metals Recycling Operations, Steel Fabrication Operations and Aluminum Operations. Steel Operations segment consists primarily of steelmaking and various coating operations. Metals Recycling operations segment include both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage and scrap management services, strategically located primarily in close proximity to its steel mills and other end-user scrap consumers, across the United States, and Central and Northern Mexico. Steel fabrication operations segment include seven new millennium building systems plants that primarily serve the nonresidential construction industry across the United States. The Aluminum Operations includes the recycled aluminum flat rolled products mill being constructed in Columbus, Mississippi, and two satellite recycled aluminum slab centers in Arizona and Mexico.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Steel Dynamics Inc has a Value Score of 77, which is considered to be undervalued.

Steel Dynamics Inc’s price-earnings ratio is 8.5 compared to the industry median at 11.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Steel Dynamics Inc more attractive for value investors.

Steel Dynamics Inc’s price-to-book ratio is lower than its peers. This could make Steel Dynamics Inc more attractive for value investors when compared to the industry median at 1.08.

You can read more about Steel Dynamics Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Metals & Mining - Iron & Steel Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Metals & Mining - Iron & Steel stocks as well as other industrys.

Choosing Which of the 6 Best Metals & Mining - Iron & Steel Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Cleveland-Cliffs Inc stock has a Value Grade of A.
• Ramaco Resources Inc stock has a Value Grade of B.
• Nippon Steel Corp - ADR stock has a Value Grade of A.
• Plaintree Systems Inc. (USA) stock has a Value Grade of B.
• Companhia Siderurgica Nacional SA (ADR) stock has a Value Grade of B.
• Steel Dynamics Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Metals & Mining - Iron & Steel industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Metals & Mining - Iron & Steel Stocks

Want to learn more about Metals & Mining - Iron & Steel stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Tuesday, July 09
• 4 Undervalued Metals & Mining - Iron & Steel Stocks for Monday, July 08
• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Friday, July 05
• Why Alpha Metallurgical Resources Inc’s (AMR) Stock Is Down 5.25%

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