Back to top

Image: Bigstock

Should Value Investors Buy Maximus (MMS) Stock?

Read MoreHide Full Article

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is Maximus (MMS - Free Report) . MMS is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A.

We should also highlight that MMS has a P/B ratio of 2.83. 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 3.12. Over the past year, MMS's P/B has been as high as 3.10 and as low as 2.22, with a median of 2.42.

Finally, our model also underscores that MMS has a P/CF ratio of 11.31. 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. MMS's current P/CF looks attractive when compared to its industry's average P/CF of 12.67. Within the past 12 months, MMS's P/CF has been as high as 13.19 and as low as 8.67, with a median of 9.99.

Value investors will likely look at more than just these metrics, but the above data helps show that Maximus is likely undervalued currently. And when considering the strength of its earnings outlook, MMS sticks out as one of the market's strongest value stocks.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Maximus, Inc. (MMS) - free report >>

Published in