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Is Matthews International (MATW) Stock Undervalued Right Now?

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·2 min read
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Matthews International (MATW). MATW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.86, while its industry has an average P/E of 16.39. Over the last 12 months, MATW's Forward P/E has been as high as 11.39 and as low as 5.49, with a median of 8.37.

Another notable valuation metric for MATW is its P/B ratio of 1.18. 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 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 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 0.47. This compares to its industry's average P/S of 1.22.

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


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