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Are Investors Undervaluing Mercedes-Benz Group AG (MBGAF) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

One stock to keep an eye on is Mercedes-Benz Group AG (MBGAF - Free Report) . MBGAF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.32, which compares to its industry's average of 9.19. Over the last 12 months, MBGAF's Forward P/E has been as high as 6.09 and as low as 3.91, with a median of 5.44.

We should also highlight that MBGAF has a P/B ratio of 0.75. The P/B ratio pits a stock's market value against 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 1.10. Over the past year, MBGAF's P/B has been as high as 0.95 and as low as 0.65, with a median of 0.85.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. MBGAF has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.66.

Finally, we should also recognize that MBGAF has a P/CF ratio of 3.10. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.60. MBGAF's P/CF has been as high as 3.96 and as low as 1.68, with a median of 3.56, all within the past year.

These are only a few of the key metrics included in Mercedes-Benz Group AG'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, MBGAF looks like an impressive value stock at the moment.


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