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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Mattel (MAT - Free Report) . MAT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.99 right now. For comparison, its industry sports an average P/E of 25.55. MAT's Forward P/E has been as high as 16.42 and as low as 10.98, with a median of 13.73, all within the past year.
Investors should also note that MAT holds a PEG ratio of 1.16. 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. MAT's industry has an average PEG of 1.28 right now. Over the last 12 months, MAT's PEG has been as high as 3.24 and as low as 0.98, with a median of 1.39.
Investors should also recognize that MAT has a P/B ratio of 3.22. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.48. MAT's P/B has been as high as 4.03 and as low as 2.72, with a median of 3.22, over the past year.
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. MAT has a P/S ratio of 1.2. This compares to its industry's average P/S of 1.54.
Finally, we should also recognize that MAT has a P/CF ratio of 12.27. 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. MAT's current P/CF looks attractive when compared to its industry's average P/CF of 31.64. Over the past 52 weeks, MAT's P/CF has been as high as 29.81 and as low as 10.39, with a median of 15.57.
These are only a few of the key metrics included in Mattel'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, MAT looks like an impressive value stock at the moment.
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Should Value Investors Buy Mattel (MAT) Stock?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Mattel (MAT - Free Report) . MAT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.99 right now. For comparison, its industry sports an average P/E of 25.55. MAT's Forward P/E has been as high as 16.42 and as low as 10.98, with a median of 13.73, all within the past year.
Investors should also note that MAT holds a PEG ratio of 1.16. 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. MAT's industry has an average PEG of 1.28 right now. Over the last 12 months, MAT's PEG has been as high as 3.24 and as low as 0.98, with a median of 1.39.
Investors should also recognize that MAT has a P/B ratio of 3.22. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.48. MAT's P/B has been as high as 4.03 and as low as 2.72, with a median of 3.22, over the past year.
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. MAT has a P/S ratio of 1.2. This compares to its industry's average P/S of 1.54.
Finally, we should also recognize that MAT has a P/CF ratio of 12.27. 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. MAT's current P/CF looks attractive when compared to its industry's average P/CF of 31.64. Over the past 52 weeks, MAT's P/CF has been as high as 29.81 and as low as 10.39, with a median of 15.57.
These are only a few of the key metrics included in Mattel'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, MAT looks like an impressive value stock at the moment.