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Are Investors Undervaluing Banco Macro (BMA) Right Now?

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·3 min read
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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Banco Macro (BMA). BMA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for BMA is its P/B ratio of 0.59. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.38. Within the past 52 weeks, BMA's P/B has been as high as 3.58 and as low as 0.55, with a median of 1.23.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BMA has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.91.

Finally, investors will want to recognize that BMA has a P/CF ratio of 6.99. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.74. Over the past year, BMA's P/CF has been as high as 7.73 and as low as 4.22, with a median of 5.30.

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


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