Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 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 5 undervalued stocks in the Metals & Mining - Iron & Steel industry for Wednesday, July 31, 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.

Ampco-Pittsburgh Corp’s Value Grade

Value Grade:

Ampco-Pittsburgh Corporation manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. The Company's segments include Forged and Cast Engineered Products (FCEP) and the Air and Liquid Processing (ALP). The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products. Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls are produced in a variety of iron and steel qualities. The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation, a subsidiary of the Company. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturer/commercial, nuclear power generation and industrial manufacturing.

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.

Ampco-Pittsburgh Corp has a Value Score of 88, which is considered to be undervalued.

When you look at Ampco-Pittsburgh Corp’s price-to-sales ratio at 0.07 compared to the industry median at 0.53, this company has a lower price relative to revenue compared to its peers. This could make Ampco-Pittsburgh Corp’s stock more attractive for value investors.

Now, let’s assess Ampco-Pittsburgh Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 7.9, when compared to the industry median of 7.1, 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. Ampco-Pittsburgh Corp’s shareholder yield is lower than its industry median ratio of 1.92%. 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. Ampco-Pittsburgh Corp’s price-to-book ratio is lower than its industry median ratio of 1.13. This could make Ampco-Pittsburgh Corp more attractive to investors looking for a new addition to their portfolio.

Commercial Metals Company’s Value Grade

Value Grade:

Commercial Metals Company is engaged in offering products and technologies for the global construction sector through manufacturing network principally located in the United States and Central Europe. The Company’s solutions support construction across a variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission. Its segments include North America and Europe. The North America segment provides a diverse offering of products and solutions to support the construction sector composed primarily of a vertically integrated network of recycling facilities, steel mills and fabrication operations. The Company’s 43 scrap metal recycling facilities, primarily located in the southeast and central United States process ferrous and nonferrous scrap metals. The Europe segment is composed primarily of a vertically integrated network of recycling facilities, an EAF mini mill and fabrication operations located in Poland.

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.

Commercial Metals Company has a Value Score of 78, which is considered to be undervalued.

Commercial Metals Company’s price-earnings ratio is 12.4 compared to the industry median at 12.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Commercial Metals Company more attractive for value investors.

Commercial Metals Company’s price-to-book ratio is lower than its peers. This could make Commercial Metals Company more attractive for value investors when compared to the industry median at 1.13.

You can read more about Commercial Metals Company’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.

Highway Holdings Limited’s Value Grade

Value Grade:

Highway Holdings Limited is a holding company. The Company manufactures and supplies various metal, plastic and electric parts, components and products to its original equipment manufacturing (OEM) clients, which are used by the Company's customers in the manufacturing of products, such as photocopiers, laser printers, compact disc players, laser disc players, computer equipment, electrical components, electrical connectors, vacuum cleaners, light fixtures, electro motors, pumps, automobiles and dishwasher, and other washing machine components. The Company operates in two segments: the metal stamping and mechanical OEM segment, and the electric OEM segment. The metal stamping and mechanical OEM segment focuses on the manufacture and sale of metal parts and components, whereas the electric OEM segment focuses on the manufacture and sale of plastic and electronic parts, components and machines.

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.

Highway Holdings Limited has a Value Score of 65, which is considered to be undervalued.

Highway Holdings Limited’s price-to-book ratio is lower than its peers. This could make Highway Holdings Limited more attractive for value investors when compared to the industry median at 1.13.

You can read more about Highway Holdings Limited’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.

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 70, which is considered to be undervalued.

Ramaco Resources Inc’s price-earnings ratio is 8.0 compared to the industry median at 12.7. 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 1.13.

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.

Ternium SA (ADR)’s Value Grade

Value Grade:

Ternium S.A. is a producer of steel products. The Company produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers, steel processors or end users. The Company operates through two segments: Steel and Mining. The Steel segment includes the sales of steel products, and the Mining segment includes the sales of iron ore products, which are primarily inter-company. The Steel segment comprises three operating segments: Mexico, the Southern Region, and Other Markets. In the steel segment, steel products include slabs, billets, and round bars (steel in its basic, semi-finished state), hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plate, hot dipped galvanized and electrogalvanized sheets and pre-painted sheets, steel pipes and tubular products, beams, roll-formed products, and other products. In the mining segment, iron ore is sold as concentrates (fines) and pellets.

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.

Ternium SA (ADR) has a Value Score of 97, which is considered to be undervalued.

Ternium SA (ADR)’s price-earnings ratio is 10.5 compared to the industry median at 12.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Ternium SA (ADR) more attractive for value investors.

Ternium SA (ADR)’s price-to-book ratio is higher than its peers. This could make Ternium SA (ADR) less attractive for value investors when compared to the industry median at 1.13.

You can read more about Ternium 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.

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 5 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.

• Ampco-Pittsburgh Corp stock has a Value Grade of A.
• Commercial Metals Company stock has a Value Grade of B.
• Highway Holdings Limited stock has a Value Grade of B.
• Ramaco Resources Inc stock has a Value Grade of B.
• Ternium SA (ADR) stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Metals & Mining - Iron & Steel Stocks for Wednesday, July 31
• 3 Undervalued Metals & Mining - Iron & Steel Stocks for Tuesday, July 30
• 5 Undervalued Metals & Mining - Iron & Steel Stocks for Monday, July 29
• 3 Undervalued Metals & Mining - Iron & Steel Stocks for Friday, July 26

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