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Are Investors Undervaluing Medallion Financial (MFIN) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Medallion Financial (MFIN - Free Report) is a stock many investors are watching right now. MFIN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 6.35. This compares to its industry's average Forward P/E of 6.85. Over the past year, MFIN's Forward P/E has been as high as 7.31 and as low as 3.41, with a median of 5.20.

Another notable valuation metric for MFIN is its P/B ratio of 0.48. 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 0.76. Over the past 12 months, MFIN's P/B has been as high as 0.68 and as low as 0.40, with a median of 0.51.

These are only a few of the key metrics included in Medallion Financial's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MFIN looks like an impressive value stock at the moment.


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