Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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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7 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 7 undervalued stocks in the Metals & Mining - Iron & Steel industry for Friday, August 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.

Alpha Metallurgical Resources Inc’s Value Grade

Value Grade:

Alpha Metallurgical Resources, Inc. is a mining company with operations across Virginia and West Virginia. The Company supplies metallurgical products to the steel industry. Its portfolio of mining operations consists of about 15 underground mines, seven surface mines and nine coal preparation plants. It extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities. It conducts mining operations only in the United States with mines in Central Appalachia. The Company operates in one segment: Met, which consists of five active mines and two preparation plants in Virginia, 17 active mines and six preparation plants in West Virginia, as well as expenses associated with certain idled/closed mines. The Met segment operations consist of met coal mines, including Deep Mine 41, Road Fork 52, Black Eagle, and Lynn Branch. It ships met coal to domestic and international steel and coke producers.

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.

Alpha Metallurgical Resources Inc has a Value Score of 92, which is considered to be undervalued.

When you look at Alpha Metallurgical Resources Inc’s price-to-sales ratio at 0.99 compared to the industry median at 0.56, this company has a higher price relative to revenue compared to its peers. This could make Alpha Metallurgical Resources Inc’s stock less attractive for value investors.

Alpha Metallurgical Resources Inc’s price-earnings ratio is 7.62 compared to the industry median at 11.06. This means it has a lower share price relative to earnings compared to its peers. This could make Alpha Metallurgical Resources Inc more attractive for value investors.

Now, let’s assess Alpha Metallurgical Resources Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.7, when compared to the industry median of 6.7, the company may be considered undervalued 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. Alpha Metallurgical Resources Inc’s shareholder yield is higher than its industry median ratio of 2.37%. 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. Alpha Metallurgical Resources Inc’s price-to-book ratio is higher than its industry median ratio of 1.03. This could make Alpha Metallurgical Resources Inc less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Alpha Metallurgical Resources Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Alpha Metallurgical Resources Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.44. This could make Alpha Metallurgical Resources Inc more attractive because the lower P/FCF ratio indicates that Alpha Metallurgical Resources 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.

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.

Ampco-Pittsburgh Corp’s price-to-book ratio is higher than its peers. This could make Ampco-Pittsburgh Corp less attractive for value investors when compared to the industry median at 1.03.

You can read more about Ampco-Pittsburgh Corp’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.

Huadi International Group Co., Ltd.’s Value Grade

Value Grade:

Huadi International Group Co Ltd is a holding company primarily engaged in the new products development, manufacturing, marketing and sales of stainless steel seamless pipes, tubes and stainless steel bar. Its core product is HuaGang stainless steel seamless pipe. The Company is offering a comprehensive range of products with a specialty in high-end products such as 347H corrosion and acid-resistant stainless steel seamless pipes, S32205 duplex stainless steel plates and automobile steel plates, bright steel pipes as well as precision tubes. The products are used in the oil & gas transmission, chemistry engineering, food processing, medical devices, aeronautics and astronautics, boiler, irrigation works construction, electricity, automobile, naval architecture, paper mill and mechanical industries. The Company conducts its businesses within the China market and to overseas markets such as United States, Mexico, Thailand, Australia, Argentina, India, the Philippines and Canada.

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.

Huadi International Group Co., Ltd. has a Value Score of 71, which is considered to be undervalued.

Huadi International Group Co., Ltd.’s price-earnings ratio is 9.6 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 Huadi International Group Co., Ltd. more attractive for value investors.

Huadi International Group Co., Ltd.’s price-to-book ratio is higher than its peers. This could make Huadi International Group Co., Ltd. less attractive for value investors when compared to the industry median at 1.03.

You can read more about Huadi International Group Co., Ltd.’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.

Metallus Inc’s Value Grade

Value Grade:

Metallus Inc., formerly TimkenSteel Corporation, manufactures alloy steel, as well as carbon and micro-alloy steel using electric arc furnace (EAF) technology. The Company's portfolio includes special bar quality (SBQ) bars, seamless mechanical tubing (tubes), manufactured components, such as precision steel components, and billets. The Company manages raw material recycling programs, which are used internally as a feeder system for its melt operations and allow it to sell scrap not used in its operations to third parties. The Company's products and solutions are used in a range of demanding applications in various market sectors, including automotive; oil and gas; industrial equipment; mining; construction; rail; defense; heavy truck; agriculture, and power generation. Its production of manufactured components takes place at two downstream manufacturing facilities: Tryon Peak (Columbus, North Carolina) and St. Clair (Eaton, Ohio).

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.

Metallus Inc has a Value Score of 87, which is considered to be undervalued.

Metallus Inc’s price-earnings ratio is 11.6 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 Metallus Inc less attractive for value investors.

Metallus Inc’s price-to-book ratio is lower than its peers. This could make Metallus Inc more attractive for value investors when compared to the industry median at 1.03.

You can read more about Metallus 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.

Posco Holdings Inc (ADR)’s Value Grade

Value Grade:

Posco Holdings Inc, formerly Posco, is a Korea-based company principally engaged in the manufacture and distribution of steel products. The Company operates its business through four segments. The Steel segment produces and sells steel products such as hot rolled steel, cold rolled steel, stainless steel, among others. The Trading segment engages in the global trade, including the export and import of steel products. The Engineering and Construction (E&C;) segment plans, designs and builds industrial plants, civil engineering projects, commercial and residential buildings. The Other segment is engaged in the power plants, information and communication related services and other businesses.

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.

Posco Holdings Inc (ADR) has a Value Score of 89, which is considered to be undervalued.

Posco Holdings Inc (ADR)’s price-earnings ratio is 16.3 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 Posco Holdings Inc (ADR) less attractive for value investors.

Posco Holdings Inc (ADR)’s price-to-book ratio is higher than its peers. This could make Posco Holdings Inc (ADR) less attractive for value investors when compared to the industry median at 1.03.

You can read more about Posco Holdings Inc (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 98, which is considered to be undervalued.

Plaintree Systems Inc. (USA)’s price-to-book ratio is higher than its peers. This could make Plaintree Systems Inc. (USA) less attractive for value investors when compared to the industry median at 1.03.

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.

Worthington Steel Inc’s Value Grade

Value Grade:

Worthington Steel, Inc. is a steel processor and producer of electrical steel laminations and automotive lightweighting solutions. It is engaged in processing and selling flat-rolled steel coils. Its product lines and processing capabilities include carbon flat-roll steel processing, electrical steel laminations and tailor welded products. It performs a variety of value-added processes based on customer requirements including pickling, specialty re-rolling, hot dip galvanizing, and blanking. It manufactures precision magnetic steel laminations for the automotive (including applications for electrified vehicles), industrial motor, generator and transformer industries. Tailor Welded Products include Tailor Welded Blanks and Aluminum Tailor Welded Blanks. Tailor Welded Blanks are made from individual sheets of steel of different thickness, strength and coating which are joined together by laser welding. Aluminum Tailor Welded Blanks are processed using friction stir welding technology.

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.

Worthington Steel Inc has a Value Score of 83, which is considered to be undervalued.

Worthington Steel Inc’s price-earnings ratio is 11.0 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 Worthington Steel Inc more attractive for value investors.

Worthington Steel Inc’s price-to-book ratio is lower than its peers. This could make Worthington Steel Inc more attractive for value investors when compared to the industry median at 1.03.

You can read more about Worthington Steel 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 7 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.

• Alpha Metallurgical Resources Inc stock has a Value Grade of A.
• Ampco-Pittsburgh Corp stock has a Value Grade of A.
• Huadi International Group Co., Ltd. stock has a Value Grade of B.
• Metallus Inc stock has a Value Grade of A.
• Posco Holdings Inc (ADR) stock has a Value Grade of A.
• Plaintree Systems Inc. (USA) stock has a Value Grade of A.
• Worthington Steel Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued Metals & Mining - Iron & Steel Stocks for Friday, August 09
• 5 Undervalued Metals & Mining - Iron & Steel Stocks for Thursday, August 08
• Why Carpenter Technology Corporation’s (CRS) Stock Is Up 4.32%
• Why Ramaco Resources Inc’s (METC) Stock Is Up 13.03%

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