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Should Value Investors Buy Mattel (MAT) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Mattel (MAT - Free Report) . MAT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.76, while its industry has an average P/E of 23.84. Over the past 52 weeks, MAT's Forward P/E has been as high as 16 and as low as 10.98, with a median of 13.26.

Investors should also recognize that MAT has a P/B ratio of 3.31. 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 5.42. Over the past year, MAT's P/B has been as high as 3.99 and as low as 2.76, with a median of 3.21.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MAT has a P/S ratio of 1.2. This compares to its industry's average P/S of 1.7.

Finally, we should also recognize that MAT has a P/CF ratio of 11.24. 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. MAT's current P/CF looks attractive when compared to its industry's average P/CF of 30.27. MAT's P/CF has been as high as 29.81 and as low as 9.36, with a median of 14.25, all within the past year.

These are just a handful of the figures considered in Mattel'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 MAT is an impressive value stock right now.


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