Are Investors Undervaluing MGIC Investment (MTG) Right Now?
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is MGIC Investment (MTG). MTG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 6.79, which compares to its industry's average of 8.69. Over the past 52 weeks, MTG's Forward P/E has been as high as 7.09 and as low as 4.53, with a median of 5.96.
Investors should also recognize that MTG has a P/B ratio of 0.92. 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 solid versus its industry's average P/B of 2.24. Over the past 12 months, MTG's P/B has been as high as 1.03 and as low as 0.77, with a median of 0.88.
Finally, our model also underscores that MTG has a P/CF ratio of 5.04. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MTG's current P/CF looks attractive when compared to its industry's average P/CF of 9.47. Over the past year, MTG's P/CF has been as high as 5.96 and as low as 4.04, with a median of 4.64.
These are just a handful of the figures considered in MGIC Investment'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 MTG is an impressive value stock right now.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
