Are Investors Undervaluing Sibanye Gold Limited (SBSW) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Sibanye Gold Limited (SBSW). SBSW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 3.52. This compares to its industry's average Forward P/E of 7.35. Over the past year, SBSW's Forward P/E has been as high as 6.84 and as low as 3.15, with a median of 4.37.

We should also highlight that SBSW has a P/B ratio of 2.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.16. SBSW's P/B has been as high as 4.49 and as low as 2.18, with a median of 3.14, over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Sibanye Gold Limited is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SBSW feels like a great value stock at the moment.

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By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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