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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Magna (MGA - Free Report) is a stock many investors are watching right now. MGA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.24. This compares to its industry's average Forward P/E of 18.28. Over the past 52 weeks, MGA's Forward P/E has been as high as 17.08 and as low as 9.71, with a median of 12.05.
We also note that MGA holds a PEG ratio of 0.53. 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. MGA's industry currently sports an average PEG of 1.05. Within the past year, MGA's PEG has been as high as 5.18 and as low as 0.50, with a median of 2.30.
We should also highlight that MGA has a P/B ratio of 2.18. The P/B ratio is used to compare a stock's market value with 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 3.85. Over the past 12 months, MGA's P/B has been as high as 2.59 and as low as 1.30, with a median of 1.94.
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. MGA has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.83.
Finally, we should also recognize that MGA has a P/CF ratio of 9.68. 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. MGA's P/CF compares to its industry's average P/CF of 20.10. Over the past year, MGA's P/CF has been as high as 12.06 and as low as 6.71, with a median of 10.06.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Magna is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGA feels like a great value stock at the moment.
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Are Investors Undervaluing Magna (MGA) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Magna (MGA - Free Report) is a stock many investors are watching right now. MGA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.24. This compares to its industry's average Forward P/E of 18.28. Over the past 52 weeks, MGA's Forward P/E has been as high as 17.08 and as low as 9.71, with a median of 12.05.
We also note that MGA holds a PEG ratio of 0.53. 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. MGA's industry currently sports an average PEG of 1.05. Within the past year, MGA's PEG has been as high as 5.18 and as low as 0.50, with a median of 2.30.
We should also highlight that MGA has a P/B ratio of 2.18. The P/B ratio is used to compare a stock's market value with 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 3.85. Over the past 12 months, MGA's P/B has been as high as 2.59 and as low as 1.30, with a median of 1.94.
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. MGA has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.83.
Finally, we should also recognize that MGA has a P/CF ratio of 9.68. 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. MGA's P/CF compares to its industry's average P/CF of 20.10. Over the past year, MGA's P/CF has been as high as 12.06 and as low as 6.71, with a median of 10.06.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Magna is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGA feels like a great value stock at the moment.