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Are Investors Undervaluing MoneyGram (MGI) Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

MoneyGram is a stock many investors are watching right now. MGI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.98, which compares to its industry's average of 10.08. Over the past 52 weeks, MGI's Forward P/E has been as high as 14.67 and as low as 5.46, with a median of 10.76.

Investors will also notice that MGI has a PEG ratio of 0.89. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MGI's industry has an average PEG of 1.02 right now. MGI's PEG has been as high as 0.91 and as low as 0.89, with a median of 0.89, all within the past year.

Finally, we should also recognize that MGI has a P/CF ratio of 4.05. 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. MGI's current P/CF looks attractive when compared to its industry's average P/CF of 10.06. Over the past 52 weeks, MGI's P/CF has been as high as 8.37 and as low as 4.05, with a median of 5.88.

These are only a few of the key metrics included in MoneyGram'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, MGI looks like an impressive value stock at the moment.