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MCS vs. MTN: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Leisure and Recreation Services sector might want to consider either Marcus (MCS - Free Report) or Vail Resorts (MTN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Marcus has a Zacks Rank of #1 (Strong Buy), while Vail Resorts has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MCS has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

MCS currently has a forward P/E ratio of 22.28, while MTN has a forward P/E of 31. We also note that MCS has a PEG ratio of 1.49. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MTN currently has a PEG ratio of 2.07.

Another notable valuation metric for MCS is its P/B ratio of 2.24. 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. By comparison, MTN has a P/B of 5.16.

Based on these metrics and many more, MCS holds a Value grade of B, while MTN has a Value grade of C.

MCS has seen stronger estimate revision activity and sports more attractive valuation metrics than MTN, so it seems like value investors will conclude that MCS is the superior option right now.


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Marcus Corporation (The) (MCS) - free report >>

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