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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is Medallion Financial (MFIN). MFIN 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 7.29 right now. For comparison, its industry sports an average P/E of 8.78. Over the last 12 months, MFIN's Forward P/E has been as high as 7.45 and as low as 4.55, with a median of 5.52.
Another notable valuation metric for MFIN is its P/B ratio of 0.46. 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 0.81. Over the past 12 months, MFIN's P/B has been as high as 0.55 and as low as 0.41, with a median of 0.47.
Finally, we should also recognize that MFIN has a P/CF ratio of 4.26. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.67. MFIN's P/CF has been as high as 4.42 and as low as 3.18, with a median of 4.08, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Medallion Financial is likely undervalued currently. And when considering the strength of its earnings outlook, MFIN sticks out as one of the market's strongest value stocks.
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Medallion Financial Corp. (MFIN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).