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Are Investors Undervaluing Magic Software Enterprises (MGIC) Right Now?
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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.
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 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 to watch right now is Magic Software Enterprises (MGIC - Free Report) . MGIC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.62, which compares to its industry's average of 25.02. Over the last 12 months, MGIC's Forward P/E has been as high as 20.94 and as low as 12.65, with a median of 15.72.
Another valuation metric that we should highlight is MGIC's P/B ratio of 3. 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 solid versus its industry's average P/B of 8. Over the past year, MGIC's P/B has been as high as 3.65 and as low as 2.70, with a median of 3.13.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGIC has a P/S ratio of 1.38. This compares to its industry's average P/S of 3.92.
Finally, our model also underscores that MGIC has a P/CF ratio of 14.90. 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. MGIC's current P/CF looks attractive when compared to its industry's average P/CF of 16.90. MGIC's P/CF has been as high as 22.73 and as low as 13.40, with a median of 17.99, all within the past year.
These are just a handful of the figures considered in Magic Software Enterprises's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MGIC is an impressive value stock right now.
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Are Investors Undervaluing Magic Software Enterprises (MGIC) Right Now?
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.
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 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 to watch right now is Magic Software Enterprises (MGIC - Free Report) . MGIC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.62, which compares to its industry's average of 25.02. Over the last 12 months, MGIC's Forward P/E has been as high as 20.94 and as low as 12.65, with a median of 15.72.
Another valuation metric that we should highlight is MGIC's P/B ratio of 3. 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 solid versus its industry's average P/B of 8. Over the past year, MGIC's P/B has been as high as 3.65 and as low as 2.70, with a median of 3.13.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGIC has a P/S ratio of 1.38. This compares to its industry's average P/S of 3.92.
Finally, our model also underscores that MGIC has a P/CF ratio of 14.90. 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. MGIC's current P/CF looks attractive when compared to its industry's average P/CF of 16.90. MGIC's P/CF has been as high as 22.73 and as low as 13.40, with a median of 17.99, all within the past year.
These are just a handful of the figures considered in Magic Software Enterprises's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MGIC is an impressive value stock right now.