Are Investors Undervaluing Gold Fields Limited (GFI) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Gold Fields Limited (GFI). GFI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.60. This compares to its industry's average Forward P/E of 14.96. Over the past 52 weeks, GFI's Forward P/E has been as high as 14.68 and as low as 6.76, with a median of 9.82.
We also note that GFI holds a PEG ratio of 0.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GFI's PEG compares to its industry's average PEG of 0.49. Over the last 12 months, GFI's PEG has been as high as 2.36 and as low as 0.35, with a median of 1.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Gold Fields Limited is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GFI feels like a great value stock at the moment.
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