Yahoo Finance ARREF vs. SCCO: Which Stock Should Value Investors Buy Now?
Investors with an interest in Mining - Non Ferrous stocks have likely encountered both Amerigo Resources (ARREF) and Southern Copper (SCCO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Amerigo Resources has a Zacks Rank of #1 (Strong Buy), while Southern Copper has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ARREF is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ARREF currently has a forward P/E ratio of 9.58, while SCCO has a forward P/E of 17.76. We also note that ARREF has a PEG ratio of 0.48. 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. SCCO currently has a PEG ratio of 14.80.
Another notable valuation metric for ARREF is its P/B ratio of 1.61. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SCCO has a P/B of 6.56.
These are just a few of the metrics contributing to ARREF's Value grade of B and SCCO's Value grade of C.
ARREF has seen stronger estimate revision activity and sports more attractive valuation metrics than SCCO, so it seems like value investors will conclude that ARREF is the superior option right now.
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Amerigo Resources Ltd. (ARREF) : Free Stock Analysis Report
Southern Copper Corporation (SCCO) : Free Stock Analysis Report
