Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Is Voestalphine (VLPNY) A Suitable Pick For Value Investors?

By Zacks Investment ResearchStock MarketsSep 05, 2019 09:45PM ET
www.investing.com/analysis/is-voestalphine-vlpny-a-suitable-pick-for-value-investors-200462460
Is Voestalphine (VLPNY) A Suitable Pick For Value Investors?
By Zacks Investment Research   |  Sep 05, 2019 09:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?

One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Voestalphine AG (OTC:VLPNY) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:

PE Ratio

A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.

On this front, Voestalphine has a trailing twelve months PE ratio of 6.8, as you can see in the chart below:



This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 18.09. If we focus on the long-term PE trend, Voestalphine’s current PE level puts it below its midpoint of 10.65 over the past five years. Moreover, the current level stands well below the highs for the stock, suggesting that it can be a solid entry point.



Further, the stock’s PE also compares favorably with the Zacks Basic Materials sector’s trailing twelve months PE ratio, which stands at 14.16. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.



We should also point out that Voestalphine has a forward PE ratio (price relative to this year’s earnings) of just 15.05, so it is fair to say that a slightly more value-oriented path may be ahead for Voestalphine stock in the near term too.

P/S Ratio

Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.

Right now, Voestalphine has a P/S ratio of about 0.26. This is a bit lower than the S&P 500 average, which comes in at 3.19x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.



If anything, this suggests some level of undervalued trading—at least compared to historical norms.

Broad Value Outlook

In aggregate, Voestalphine currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Voestalphine a solid choice for value investors, and some of its other key metrics make this pretty clear too.

For example, the P/CF ratio (another great indicator of value) comes in at 4.32, which is far better than the industry average of 7.32. Clearly, VLPNY is a solid choice on the value front from multiple angles.

What About the Stock Overall?

Though Voestalphine might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of D and a Momentum Score of D. This gives VLPNY a Zacks VGM score — or its overarching fundamental grade — of D. (You can read more about the Zacks Style Scores here >>)

Meanwhile, the company’s recent earnings estimates have been dismal at best. The current year has seen none estimates go higher in the past sixty days compared to two lower, while the next year estimate has seen none up and two down in the same time period.

This has had a negative impact on the consensus estimate though as the current year consensus estimate has dropped by 30.2% in the past two months, while the full year estimate has declined by 20.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:

Voestalpine AG Price and Consensus

Apart from this somewhat soft trend the stock has a Zacks Rank #3 (Hold) which is why we are looking for in-line performance from the company in the near term.

Bottom Line

Voestalphine is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Further, a strong industry rank (among Top 42% of more than 250 industries) instills our confidence. However, over the past two years, the Zacks Steel-Specialty industry has clearly underperformed the broader market, as you can see below:



So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.

Wall Street’s Next Amazon (NASDAQ:AMZN)

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>



Voestalpine AG (VLPNY): Free Stock Analysis Report

Original post
Is Voestalphine (VLPNY) A Suitable Pick For Value Investors?
 

Related Articles

Is Voestalphine (VLPNY) A Suitable Pick For Value Investors?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email