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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Matthews International (MATW) is a stock many investors are watching right now. MATW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.14, while its industry has an average P/E of 16.12. Over the past year, MATW's Forward P/E has been as high as 12.64 and as low as 7.91, with a median of 9.58.
We should also highlight that MATW has a P/B ratio of 1.38. The P/B ratio pits a stock's market value against 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 3.78. Over the past year, MATW's P/B has been as high as 2.02 and as low as 1.08, with a median of 1.45.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MATW has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.1.
Finally, we should also recognize that MATW has a P/CF ratio of 8.26. 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 11.21. Within the past 12 months, MATW's P/CF has been as high as 9.71 and as low as 6.44, with a median of 7.58.
These are just a handful of the figures considered in Matthews 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 MATW is an impressive value stock right now.
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