Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Mobile TeleSystems PJSC stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Mobile TeleSystems has a trailing twelve months PE ratio of 15.30, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.11. If we focus on the long-term PE trend, Mobile TeleSystems’ current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
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The reason for this increase is that over the past few months, the stock’s price has been on a uptrend while the earnings have declined consistently. Both of these trends have had an inflating effect on the PE ratio. These trends can be clearly seen in the chart below:
Further, the stock’s PE also compares favorably with the Zacks classified Wireless Non-US industry’s trailing twelve months PE ratio, which stands at 26.63. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
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We should also point out that Mobile TeleSystems has a forward PE ratio (price relative to this year’s earnings) of just 10.47, so it is fair to say that a slightly more value-oriented path may be ahead for Mobile TeleSystems stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Mobile TeleSystems has a P/S ratio of about 1.60. This is a bit lower than the S&P 500 average, which comes in at 2.72 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, MBT is trading roughly towards the higher end of its range in the time period from a P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Mobile TeleSystems currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Mobile TeleSystems a solid choice for value investors.
What About the Stock Overall?
Though Mobile TeleSystems might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘B’. This gives MBT a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been trending up. Both the current year and next year has seen one estimate go higher in the past sixty days compared to none lower.
This has had a meaningful impact on the consensus estimate though as the current year consensus estimate has risen by 7.4% in the past two months, while the next year estimate has inched up by 4.0%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This bullish trend is why the stock boasts a Zacks Rank #1 (Strong Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
Mobile TeleSystems is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Its strong Zacks Rank also indicates robust growth potential in the near future. However, the company’s prospects might be constrained due to adverse broader factors, as it has a sluggish industry rank (Bottom 23% out of more than 250 industries).
In fact, over the past two years, the Zacks Wireless Non-US industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Should Value Investors Choose Mobile TeleSystems (MBT)?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Mobile TeleSystems PJSC stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Mobile TeleSystems has a trailing twelve months PE ratio of 15.30, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.11. If we focus on the long-term PE trend, Mobile TeleSystems’ current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
The reason for this increase is that over the past few months, the stock’s price has been on a uptrend while the earnings have declined consistently. Both of these trends have had an inflating effect on the PE ratio. These trends can be clearly seen in the chart below:
Further, the stock’s PE also compares favorably with the Zacks classified Wireless Non-US industry’s trailing twelve months PE ratio, which stands at 26.63. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Mobile TeleSystems has a forward PE ratio (price relative to this year’s earnings) of just 10.47, so it is fair to say that a slightly more value-oriented path may be ahead for Mobile TeleSystems stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Mobile TeleSystems has a P/S ratio of about 1.60. This is a bit lower than the S&P 500 average, which comes in at 2.72 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, MBT is trading roughly towards the higher end of its range in the time period from a P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Mobile TeleSystems currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Mobile TeleSystems a solid choice for value investors.
What About the Stock Overall?
Though Mobile TeleSystems might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘D’ and a Momentum score of ‘B’. This gives MBT a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been trending up. Both the current year and next year has seen one estimate go higher in the past sixty days compared to none lower.
This has had a meaningful impact on the consensus estimate though as the current year consensus estimate has risen by 7.4% in the past two months, while the next year estimate has inched up by 4.0%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Mobile TeleSystems OJSC Price and Consensus
Mobile TeleSystems OJSC Price and Consensus | Mobile TeleSystems OJSC Quote
This bullish trend is why the stock boasts a Zacks Rank #1 (Strong Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
Mobile TeleSystems is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Its strong Zacks Rank also indicates robust growth potential in the near future. However, the company’s prospects might be constrained due to adverse broader factors, as it has a sluggish industry rank (Bottom 23% out of more than 250 industries).
In fact, over the past two years, the Zacks Wireless Non-US industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>