Is Materion (MTRN) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Materion (MTRN). MTRN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another notable valuation metric for MTRN is its P/B ratio of 1.98. 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 solid versus its industry's average P/B of 3.36. Over the past year, MTRN's P/B has been as high as 2.31 and as low as 0.89, with a median of 1.99.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MTRN has a P/S ratio of 1.04. This compares to its industry's average P/S of 1.71.
Finally, we should also recognize that MTRN has a P/CF ratio of 18.38. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MTRN's P/CF compares to its industry's average P/CF of 34.75. MTRN's P/CF has been as high as 20.57 and as low as 5.95, with a median of 15.38, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Materion is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MTRN feels like a great value stock at the moment.
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