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 Friday, September 13, 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 95, which is considered to be undervalued.

When you look at Alpha Metallurgical Resources Inc’s price-to-sales ratio at 0.78 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 6.00 compared to the industry median at 10.40. 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 6.6, 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 2.76%. 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 1.01. 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 16.38. 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.

Algoma Steel Group Inc’s Value Grade

Value Grade:

Algoma Steel Group Inc. (Algoma) is a Canada-based integrated producer of hot and cold rolled steel products including sheet and plate. The Company delivers customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. The Company is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its plate products include AR225, Heat Treated Plate, AlgoLaser, AlgoGrip and The Heavies. Its plate products include Hot Rolled Sheet - DSPC, Hot Rolled Sheet - 106'' Mill, AR200, Cold Rolled and Floor Plate. The Company has a raw steel production capacity of an estimated 2.8 million tons per year. Its Direct Strip Production Complex is a thin slab caster coupled with direct hot rolling in North America. In addition, its heat-treated plate facility provides a full range of heat-treated products for abrasion resistant, ballistic and other specialty plate applications.

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.

Algoma Steel Group Inc has a Value Score of 87, which is considered to be undervalued.

Algoma Steel Group Inc’s price-to-book ratio is lower than its peers. This could make Algoma Steel Group Inc fairly attractive for value investors when compared to the industry median at 1.01.

You can read more about Algoma Steel Group 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.

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 82, which is considered to be undervalued.

Ramaco Resources Inc’s price-earnings ratio is 6.3 compared to the industry median at 10.4. 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 1.01.

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.

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 87, which is considered to be undervalued.

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 1.01.

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.

Nucor Corp’s Value Grade

Value Grade:

Nucor Corporation is a manufacturer of steel and steel products, with operating facilities in the United States, Canada and Mexico. Its segments include steel mills, steel products, raw materials, and Nucor Data Systems. The Steel Mills segment produces sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling, and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar and engineered special bar quality. The Steel products segment produces steel joists and joist girders, steel deck, galvanized torque tubes used in solar arrays, hollow structural section (HSS) steel tubing, electrical conduit, fabricated concrete reinforcing steel, cold finished steel, and steel fasteners. The Raw materials segment produces direct reduced iron (DRI), brokers ferrous and nonferrous metals, and pig iron. Nucor Data Systems serves its customers in the data center infrastructure industry.

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.

Nucor Corp has a Value Score of 82, which is considered to be undervalued.

Nucor Corp’s price-earnings ratio is 10.1 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Nucor Corp more attractive for value investors.

Nucor Corp’s price-to-book ratio is lower than its peers. This could make Nucor Corp more attractive for value investors when compared to the industry median at 1.01.

You can read more about Nucor 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.

Perma-Pipe International Holdings Inc’s Value Grade

Value Grade:

Perma-Pipe International Holdings, Inc. is a global engineered pipe services company offering core competencies in anti-corrosion coatings, insulation solutions, containment systems, leak detection systems, engineering support, field service, and custom fabrication. The Company engineers, designs, manufactures and sells specialty piping systems and leak detection systems. Its specialty piping systems include insulated and jacketed district heating and cooling piping systems for efficient energy distribution from central energy plants to multiple locations; primary and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products; the coating and/or insulation of oil and gas gathering and transmission pipelines, and liquid and powder based anti-corrosion coatings applied both to the external and internal surfaces of steel pipe. The Company's leak detection systems are sold with its piping systems or on a stand-alone basis.

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.

Perma-Pipe International Holdings Inc has a Value Score of 75, which is considered to be undervalued.

Perma-Pipe International Holdings Inc’s price-earnings ratio is 7.3 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Perma-Pipe International Holdings Inc more attractive for value investors.

Perma-Pipe International Holdings Inc’s price-to-book ratio is lower than its peers. This could make Perma-Pipe International Holdings Inc more attractive for value investors when compared to the industry median at 1.01.

You can read more about Perma-Pipe International Holdings 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.

• Alpha Metallurgical Resources Inc stock has a Value Grade of A.
• Algoma Steel Group Inc stock has a Value Grade of A.
• Ramaco Resources Inc stock has a Value Grade of A.
• ArcelorMittal SA (ADR) stock has a Value Grade of A.
• Nucor Corp stock has a Value Grade of A.
• Perma-Pipe International Holdings 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 Friday, September 13
• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Thursday, September 12
• Why Alpha Metallurgical Resources Inc’s (AMR) Stock Is Up 4.55%
• Why Posco Holdings Inc (ADR)’s (PKX) Stock Is Up 4.73%

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