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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company to watch right now is MoneyGram International . MGI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. MGI has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.61.
Finally, investors will want to recognize that MGI has a P/CF ratio of 7.65. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.69. MGI's P/CF has been as high as 10.84 and as low as 7.46, with a median of 8.75, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that MoneyGram International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGI feels like a great value stock at the moment.