Back to top

Are Investors Undervaluing MoneyGram (MGI) Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

MoneyGram is a stock many investors are watching right now. MGI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.91. This compares to its industry's average Forward P/E of 10.54. Over the last 12 months, MGI's Forward P/E has been as high as 14.67 and as low as 5.46, with a median of 10.61.

Investors will also notice that MGI has a PEG ratio of 0.89. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MGI's PEG compares to its industry's average PEG of 1.09.

Finally, investors should note that MGI has a P/CF ratio of 4.46. 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 P/CF compares to its industry's average P/CF of 10.50. Over the past 52 weeks, MGI's P/CF has been as high as 8.37 and as low as 3.89, with a median of 5.80.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MoneyGram 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.

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

More from Zacks Tale of the Tape

You May Like