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.

Latest Metals & Mining - Iron & Steel Stock News

Before choosing which top Metals & Mining - Iron & Steel stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The iron & steel industry was negatively impacted by pandemic-related economic shutdowns, supply chain disruptions and freezes in consumption. However, the industry has experienced a swift recovery in domestic steel demand, and steel prices were at multi-year highs at the start of 2021. As of April 28, 2021, steel prices were up 57% from the beginning of the year and up 156% compared to the full-year average price in 2020. Despite the increase in profitability for steel producers as a result, the higher prices may not be sustainable given significant excess capacity. 

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, August 25, 2023. 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 specialty metal products and customized equipment utilized by industry throughout the world. The Company?s segments include the 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. Its hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (Air & Liquid), a subsidiary of the Company. Aerofin Division of Air & Liquid Systems Corporation produces custom-engineered finned tube heat exchange coils and related heat transfer products. Buffalo Air Handling Division of Air & Liquid Systems Corporation produces large custom-designed air handling systems for the institutional pharmaceutical and general industrial building markets.

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 68, which is considered to be undervalued.

When you look at Ampco-Pittsburgh Corp’s price-to-sales ratio at 0.16 compared to the industry median at 0.55, 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.

Ampco-Pittsburgh Corp’s price-earnings ratio is 25.43 compared to the industry median at 9.21. This means it has a higher share price relative to earnings compared to its peers. This could make Ampco-Pittsburgh Corp less attractive for value investors.

Now, let’s assess Ampco-Pittsburgh Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 9.3, when compared to the industry median of 6.0, 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 4.63%. 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 1.07. This could make Ampco-Pittsburgh Corp more attractive to investors looking for a new addition to their portfolio.

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 93, which is considered to be undervalued.

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

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.

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 focused on the 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, Shipping operations and Other. It operates primarily in South Africa, with mining operations in the Northern Cape province and a port operation in Saldanha Bay, Western Cape. It holds approximately 76.3% 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 an 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 61, which is considered to be undervalued.

Kumba Iron Ore Ltd - ADR’s price-earnings ratio is 9.9 compared to the industry median at 9.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Kumba Iron Ore Ltd - ADR less 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 99, which is considered to be undervalued.

ArcelorMittal SA (ADR)’s price-earnings ratio is 5.3 compared to the industry median at 9.2. This means that it has a lower price relative to its earnings compared to its peers. This makes ArcelorMittal SA (ADR) more 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 98, which is considered to be undervalued.

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.

Olympic Steel Inc’s Value Grade

Value Grade:

Olympic Steel, Inc. is a metals service center company. The Company provides metals processing and distribution services to a range of customers. It operates through three segments: specialty metals flat products, carbon flat products, and tubular and pipe products. Specialty metals flat products segment is engaged in the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products, prime tin mill products and fabricated parts. Carbon flat products segment is engaged in the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Tubular and pipe products segment distribute metal tubing, pipe, bar, valve and fittings and fabricates pressure parts supplied to various industrial markets. The tubular and pipe products segment consist of the Chicago Tube and Iron, or CTI, business. CTI operates in the Midwestern and south-eastern United States.

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.

Olympic Steel Inc has a Value Score of 85, which is considered to be undervalued.

Olympic Steel Inc’s price-earnings ratio is 14.1 compared to the industry median at 9.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Olympic Steel Inc less attractive for value investors.

Olympic Steel Inc’s price-to-book ratio is lower than its peers. This could make Olympic Steel Inc fairly attractive for value investors when compared to the industry median at 1.07.

You can read more about Olympic 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 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.

• Ampco-Pittsburgh Corp stock has a Value Grade of B.
• Highway Holdings Limited 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 A.
• Olympic Steel Inc 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 Friday, August 25
• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Thursday, August 24
• 3 Undervalued Metals & Mining - Iron & Steel Stocks for Wednesday, August 23
• 3 Undervalued Metals & Mining - Iron & Steel Stocks for Tuesday, August 22

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