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 company to watch right now is Mattel (MAT). MAT is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Investors should also recognize that MAT has a P/B ratio of 2.53. The P/B ratio is used to compare a stock's market value with 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 4.00. MAT's P/B has been as high as 3.37 and as low as 2.21, with a median of 2.78, over the past year.
Finally, investors should note that MAT has a P/CF ratio of 7.24. 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. MAT's P/CF compares to its industry's average P/CF of 14.73. Over the past 52 weeks, MAT's P/CF has been as high as 11.42 and as low as 6.11, with a median of 7.86.
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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Mattel, Inc. (MAT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).