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 Thursday, July 11, 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.

Ascent Industries Co’s Value Grade

Value Grade:

Ascent Industries Co. is a diverse industrials company. The Company is focused on the production of stainless-steel pipe and tube and specialty chemicals. The Company’s business is divided into two reportable operating segments, Tubular Products and Specialty Chemicals. The Tubular Products segment serves markets through pipe and tube production and customers in the appliance, architectural, automotive, and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas (LNG), food processing, pharmaceutical, oil and gas and other industries. The Specialty Chemicals segment produces specialty products for the pulp and paper, coatings, adhesives, sealants, and elastomers (CASE), textile, automotive, household, industrial and institutional (HII), agricultural, water and waste-water treatment, construction, oil and gas and other industries.

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.

Ascent Industries Co has a Value Score of 81, which is considered to be undervalued.

When you look at Ascent Industries Co’s price-to-sales ratio at 0.55 compared to the industry median at 0.52, this company has a higher price relative to revenue compared to its peers. This could make Ascent Industries Co’s stock less attractive for value investors.

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. Ascent Industries Co’s shareholder yield is lower than its industry median ratio of 1.95%. 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. Ascent Industries Co’s price-to-book ratio is lower than its industry median ratio of 1.07. This could make Ascent Industries Co more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Ascent Industries Co’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Ascent Industries Co’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.65. This could make Ascent Industries Co more attractive because the lower P/FCF ratio indicates that Ascent Industries Co 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.

Kumba Iron Ore Ltd - ADR’s Value Grade

Value Grade:

Kumba Iron Ore Limited is a supplier of iron ore to the global steel industry. The Company is engaged in exploration, extraction, beneficiation, marketing, sale and shipping of iron ore. It produces iron ore at Sishen and Kolomela mines in the Northern Cape Province. The Company's segments include Sishen mine, Kolomela mine, Logistics and Shipping operations and Others. It operates primarily in South Africa, with mining operations in the Northern Cape Province and a port operation in Saldanha Bay, Western Cape. It has an approximately 75.37% interest in Sishen Iron Ore Company Proprietary Limited (SIOC). Its Sishen mine is near the town of Kathu in the Northern Cape Province. Its Kolomela mine is near Postmasburg in the Northern Cape Province. Its logistics processes and infrastructure serve as the link between its operations and its clients. Its Northern Cape operations are serviced by a dedicated iron ore rail link. Its product range includes hematite (Fe2O3) and magnetite (Fe3O4).

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.

Kumba Iron Ore Ltd - ADR has a Value Score of 66, which is considered to be undervalued.

Kumba Iron Ore Ltd - ADR’s price-earnings ratio is 6.4 compared to the industry median at 11.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Kumba Iron Ore Ltd - ADR more attractive for value investors.

Kumba Iron Ore Ltd - ADR’s price-to-book ratio is lower than its peers. This could make Kumba Iron Ore Ltd - ADR more attractive for value investors when compared to the industry median at 1.07.

You can read more about Kumba Iron Ore Ltd - 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.

ArcelorMittal SA (ADR)’s Value Grade

Value Grade:

ArcelorMittal SA is a Luxembourg-based holding company. The Company, via its subsidiaries, owns and operates steel, iron ore manufacturing and coal mining facilities in Europe, North and South America, Asia, and Africa. The Company is organized in five operating segments: NAFTA; Brazil; Europe; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA, Brazil, Europe, and ACIS segments produce flat, long, and tubular products including slabs, hot-rolled coil, cold-rolled coil, coated steel products, among others. The Mining segment provides steel operations and comprises all mines owned by the Company in the Americas, Europe, Africa, and countries of the Commonwealth of Independent States (CIS).

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.

ArcelorMittal SA (ADR) has a Value Score of 90, which is considered to be undervalued.

ArcelorMittal SA (ADR)’s price-earnings ratio is 25.8 compared to the industry median at 11.1. This means that it has a higher price relative to its earnings compared to its peers. This makes ArcelorMittal SA (ADR) less attractive for value investors.

ArcelorMittal SA (ADR)’s price-to-book ratio is higher than its peers. This could make ArcelorMittal SA (ADR) less attractive for value investors when compared to the industry median at 1.07.

You can read more about ArcelorMittal 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.

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 930.0 compared to the industry median at 11.1. 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 1.07.

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 75, which is considered to be undervalued.

Steel Dynamics Inc’s price-earnings ratio is 8.7 compared to the industry median at 11.1. 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 1.07.

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.

United States Steel Corporation’s Value Grade

Value Grade:

United States Steel Corporation is a steel producer. The Company operates through four segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment is involved in the production of slabs, strip mill plates, sheets and tin mill products, as well as all iron ore, direct reduced grade pellets, pig iron, and coke production facilities in the United States. The Mini Mill segment produces hot-rolled, cold-rolled, coated sheets and electrical steels. The USSE segment produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe. The Tubular segment produces and sells rounds, seamless and electric resistance welded (ERW) steel casing and tubing (OCTG), and standard and line pipe and mechanical tubing. It serves the automotive, construction, appliance, energy, container, and packaging industries with high value-added steel products such as its XG3 advanced high-strength steel.

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.

United States Steel Corporation has a Value Score of 91, which is considered to be undervalued.

United States Steel Corporation’s price-earnings ratio is 11.3 compared to the industry median at 11.1. This means that it has a higher price relative to its earnings compared to its peers. This makes United States Steel Corporation less attractive for value investors.

United States Steel Corporation’s price-to-book ratio is higher than its peers. This could make United States Steel Corporation less attractive for value investors when compared to the industry median at 1.07.

You can read more about United States Steel Corporation’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.

• Ascent Industries Co stock has a Value Grade of A.
• Kumba Iron Ore Ltd - ADR stock has a Value Grade of B.
• ArcelorMittal SA (ADR) stock has a Value Grade of A.
• Companhia Siderurgica Nacional SA (ADR) stock has a Value Grade of B.
• Steel Dynamics Inc stock has a Value Grade of B.
• United States Steel Corporation stock has a Value Grade of A.

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 Thursday, July 11
• 5 Undervalued Metals & Mining - Iron & Steel Stocks for Wednesday, July 10
• What You Need to Know About AZZ Inc's Q1 Earnings
• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Tuesday, July 09

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