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Is Magna (MGA) a Great Value Stock Right Now?

Zacks Equity Research

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 to watch right now is Magna (MGA). MGA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.18, while its industry has an average P/E of 10.49. Over the past 52 weeks, MGA's Forward P/E has been as high as 9.43 and as low as 6.26, with a median of 7.46.

Another notable valuation metric for MGA is its P/B ratio of 1.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MGA's current P/B looks attractive when compared to its industry's average P/B of 2.51. Over the past 12 months, MGA's P/B has been as high as 1.94 and as low as 1.29, with a median of 1.57.

Finally, investors will want to recognize that MGA has a P/CF ratio of 4.52. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.49. Over the past 52 weeks, MGA's P/CF has been as high as 6.58 and as low as 3.93, with a median of 4.88.

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


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