Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 value investors might notice is Macro Bank (BMA). BMA is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 5.21 right now. For comparison, its industry sports an average P/E of 11.38. BMA's Forward P/E has been as high as 13.85 and as low as 4.76, with a median of 8.22, all within the past year.
Investors will also notice that BMA has a PEG ratio of 0.38. 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. BMA's industry currently sports an average PEG of 0.70. BMA's PEG has been as high as 0.46 and as low as 0.21, with a median of 0.29, all within the past year.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BMA has a P/S ratio of 1.23. This compares to its industry's average P/S of 2.22.
Value investors will likely look at more than just these metrics, but the above data helps show that Macro Bank is likely undervalued currently. And when considering the strength of its earnings outlook, BMA sticks out as one of the market's strongest value stocks.
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Macro Bank Inc. (BMA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).