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Are Investors Undervaluing Matson (MATX) Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Matson (MATX) is a stock many investors are watching right now. MATX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 20.83, which compares to its industry's average of 30.65. Over the past 52 weeks, MATX's Forward P/E has been as high as 28.13 and as low as 12.74, with a median of 16.66.

MATX is also sporting a PEG ratio of 2.55. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MATX's PEG compares to its industry's average PEG of 2.60. MATX's PEG has been as high as 4.21 and as low as 2.55, with a median of 3.29, all within the past year.

Another valuation metric that we should highlight is MATX's P/B ratio of 1.94. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.94. MATX's P/B has been as high as 2.35 and as low as 1.34, with a median of 1.97, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MATX has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.91.

Finally, our model also underscores that MATX has a P/CF ratio of 6.10. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.68. Within the past 12 months, MATX's P/CF has been as high as 9.71 and as low as 4.21, with a median of 6.79.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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