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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 MoneyGram (MGI). MGI 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 8.58, which compares to its industry's average of 10.60. Over the past year, MGI's Forward P/E has been as high as 14.67 and as low as 5.46, with a median of 10.34.
MGI is also sporting a PEG ratio of 0.89. 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. MGI's industry currently sports an average PEG of 1.11.
Finally, our model also underscores that MGI has a P/CF ratio of 3.86. 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. MGI's current P/CF looks attractive when compared to its industry's average P/CF of 10.60. Over the past 52 weeks, MGI's P/CF has been as high as 8.37 and as low as 3.86, with a median of 5.64.
These are just a handful of the figures considered in MoneyGram's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MGI is an impressive value stock right now.
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