Is MGIC Investment (MTG) Stock Undervalued Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is MGIC Investment (MTG). MTG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.55, which compares to its industry's average of 7.99. Over the last 12 months, MTG's Forward P/E has been as high as 7.70 and as low as 4.53, with a median of 6.72.
We should also highlight that MTG has a P/B ratio of 1.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.44. Over the past year, MTG's P/B has been as high as 1.05 and as low as 0.79, with a median of 0.91.
Finally, investors should note that MTG has a P/CF ratio of 6.73. 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. MTG's current P/CF looks attractive when compared to its industry's average P/CF of 8.21. Over the past year, MTG's P/CF has been as high as 6.73 and as low as 4.04, with a median of 4.91.
Value investors will likely look at more than just these metrics, but the above data helps show that MGIC Investment is likely undervalued currently. And when considering the strength of its earnings outlook, MTG sticks out at as one of the market's strongest value stocks.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
