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Is Macy's (M) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Macy's (M - Free Report) . M 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 10.17, which compares to its industry's average of 13.17. Over the last 12 months, M's Forward P/E has been as high as 11.55 and as low as 7.12, with a median of 9.50.

Investors will also notice that M has a PEG ratio of 1.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. M's PEG compares to its industry's average PEG of 1.65. Over the last 12 months, M's PEG has been as high as 1.36 and as low as 0.84, with a median of 1.12.

Another notable valuation metric for M is its P/B ratio of 1.93. 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 2.36. Within the past 52 weeks, M's P/B has been as high as 2.18 and as low as 1.26, with a median of 1.81.

Finally, investors should note that M has a P/CF ratio of 4.45. 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. M's current P/CF looks attractive when compared to its industry's average P/CF of 5.80. M's P/CF has been as high as 5.02 and as low as 2.89, with a median of 4.25, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Macy's is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, M feels like a great value stock at the moment.


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