Are Investors Undervaluing International Game Technology (IGT) Right Now?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is International Game Technology (IGT). IGT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also recognize that IGT has a P/B ratio of 2.29. 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 solid versus its industry's average P/B of 6.86. Over the past year, IGT's P/B has been as high as 3.16 and as low as 1.55, with a median of 2.33.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. IGT has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.26.
Finally, our model also underscores that IGT has a P/CF ratio of 5.58. 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. IGT's current P/CF looks attractive when compared to its industry's average P/CF of 14.09. Within the past 12 months, IGT's P/CF has been as high as 6.86 and as low as 3.69, with a median of 5.32.
MGM Resorts International (MGM) may be another strong Gaming stock to add to your shortlist. MGM is a # 2 (Buy) stock with a Value grade of A.
MGM Resorts International is trading at a forward earnings multiple of 27.63 at the moment, with a PEG ratio of 1.57. This compares to its industry's average P/E of -4,843.34 and average PEG ratio of -236.09.
Over the last 12 months, MGM's P/E has been as high as 211.42, as low as -61.48, with a median of 68.26, and its PEG ratio has been as high as 7.86, as low as 1.48, with a median of 7.17.
Additionally, MGM Resorts International has a P/B ratio of 2.32 while its industry's price-to-book ratio sits at 6.86. For MGM, this valuation metric has been as high as 2.55, as low as 1.17, with a median of 1.87 over the past year.
These are just a handful of the figures considered in International Game Technology and MGM Resorts International'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 IGT and MGM is an impressive value stock right now.
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International Game Technology (IGT) : Free Stock Analysis Report
MGM Resorts International (MGM) : Free Stock Analysis Report
