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Is Michaels (MIK) a Great Value Stock 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 value investors might notice is Michaels (MIK). MIK is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MIK has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.43.

Finally, investors should note that MIK has a P/CF ratio of 14.08. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MIK's P/CF compares to its industry's average P/CF of 14.79. Over the past 52 weeks, MIK's P/CF has been as high as 16.39 and as low as 0.54, with a median of 2.02.

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