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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
MoneyGram International is a stock many investors are watching right now. MGI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGI has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.87.
Finally, investors should note that MGI has a P/CF ratio of 7.83. 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 16.56. MGI's P/CF has been as high as 13.02 and as low as 7.79, with a median of 9.60, all within the past year.
These are only a few of the key metrics included in MoneyGram International'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.