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Are Investors Undervaluing Matthews International (MATW) Right Now?

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·2 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

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 is trading with a P/E ratio of 7.60, which compares to its industry's average of 16.25. Over the past year, MATW's Forward P/E has been as high as 11.39 and as low as 5.49, with a median of 8.31.

Another valuation metric that we should highlight is MATW's P/B ratio of 1.14. 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 stock's P/B looks attractive against its industry's average P/B of 3.04. Over the past year, MATW's P/B has been as high as 1.75 and as low as 0.87, with a median of 1.27.

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. MATW has a P/S ratio of 0.47. This compares to its industry's average P/S of 1.19.

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


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