Olympic Steel may be Undervalued - Geoffrey Ching

Send Message

Geoffrey Ching enjoys investing as a part hobby, part business. His stock picks generally consist of stable businesses trading at a discount to other companies in a similar sector. He is also the founder of VectorGrader.com, a website which provides quantitative strategies for investors.

My company:: VectorGrader
My blog:: VectorGrader

Olympic Steel may be Undervalued 0 comments

Dec 5, 2010 3:45 PM | about stocks: ZEUS, MT, GGB, NUE, MTL, X, STLD, CMC, CRS, SCHN, AKS

The steel industry is hard to value because it trades at a lower valuation metric than the market as a whole. So, valuing a stock within the industry would seem to be even harder. We can, however, take a stab at it by looking at valuation metrics relative to those of other stocks within the same industry.

So to get a good idea of where Olympic Steel's (ZEUS) valuations are, below is a chart of it's P/S and those of ten other stocks in the steel industry. It's P/S, currently at 0.36, is at the low end of the range, though two other stocks have lower P/S ratios.

However, it is possible that Olympic Steel may deserve it's low valuation multiple. To see if this is the case, I look at the rating the VG stock rating system gives it.

The rating of 25.53 tells us that ZEUS's fundamentals are quite poor and that it may deserve an extremely low valuation multiple.

Stocks: ZEUS, MT, GGB, NUE, MTL, X, STLD, CMC, CRS, SCHN, AKS

Back To Geoffrey Ching's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.