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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
MoneyGram International 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.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MGI has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.64.
Finally, we should also recognize that MGI has a P/CF ratio of 7.61. 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. MGI's P/CF compares to its industry's average P/CF of 17.71. MGI's P/CF has been as high as 12.76 and as low as 7.46, with a median of 9.51, all within the past year.
These are just a handful of the figures considered in MoneyGram International'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.