Should Value Investors Buy Malibu Boats (MBUU) Stock?

MBUU

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.

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.

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 to watch right now is Malibu Boats (MBUU - Free Report) . MBUU is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also note that MBUU holds a PEG ratio of 0.94. 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. MBUU's industry currently sports an average PEG of 2.04. Within the past year, MBUU's PEG has been as high as 1.10 and as low as 0.60, with a median of 0.76.

Another valuation metric that we should highlight is MBUU's P/B ratio of 3.73. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 5.08. Within the past 52 weeks, MBUU's P/B has been as high as 6.60 and as low as 2.50, with a median of 4.15.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MBUU has a P/S ratio of 1.08. This compares to its industry's average P/S of 1.2.

Finally, we should also recognize that MBUU has a P/CF ratio of 9.18. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. MBUU's P/CF compares to its industry's average P/CF of 28.45. Over the past year, MBUU's P/CF has been as high as 21.82 and as low as 6.43, with a median of 10.62.

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

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