Are Investors Undervaluing Michaels (MIK) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is Michaels (MIK). MIK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that MIK has a PEG ratio of 0.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MIK's industry currently sports an average PEG of 1.24. Within the past year, MIK's PEG has been as high as 0.98 and as low as 0.37, with a median of 0.60.
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. MIK has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.4.
These are only a few of the key metrics included in Michaels's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MIK looks like an impressive value stock at the moment.
Click to get this free report
The Michaels Companies, Inc. (MIK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.