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Is Santander Mexico (BSMX) a Great Value Stock Right Now?

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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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 value investors might notice is Santander Mexico (BSMX - Free Report) . BSMX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.19 right now. For comparison, its industry sports an average P/E of 9.97. Over the past year, BSMX's Forward P/E has been as high as 11.34 and as low as 7.19, with a median of 8.84.

Another notable valuation metric for BSMX is its P/B ratio of 1.31. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. BSMX's current P/B looks attractive when compared to its industry's average P/B of 1.33. Over the past 12 months, BSMX's P/B has been as high as 1.70 and as low as 0.57, with a median of 1.35.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BSMX has a P/S ratio of 1.29. This compares to its industry's average P/S of 1.77.

Finally, investors should note that BSMX has a P/CF ratio of 7.55. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.27. Within the past 12 months, BSMX's P/CF has been as high as 9.89 and as low as 6.45, with a median of 7.90.

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


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