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Are Investors Undervaluing Banco Macro (BMA) Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Banco Macro (BMA). BMA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 3.64, while its industry has an average P/E of 10.70. BMA's Forward P/E has been as high as 8.86 and as low as 2.53, with a median of 4.87, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BMA has a P/S ratio of 0.69. This compares to its industry's average P/S of 1.73.

Finally, investors should note 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. BMA's P/CF compares to its industry's average P/CF of 14.74. Within the past 12 months, BMA's P/CF has been as high as 7.73 and as low as 4.22, with a median of 5.71.

Value investors will likely look at more than just these metrics, but the above data helps show that Banco Macro is likely undervalued currently. And when considering the strength of its earnings outlook, BMA sticks out at as one of the market's strongest value stocks.


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