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Is Santander Mexico (BSMX) Stock Undervalued 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 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.

One stock to keep an eye on is Santander Mexico (BSMX). BSMX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.68, while its industry has an average P/E of 8.84. Over the past year, BSMX's Forward P/E has been as high as 11.34 and as low as 7.19, with a median of 9.31.

BSMX is also sporting a PEG ratio of 0.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BSMX's industry currently sports an average PEG of 1.10. Over the past 52 weeks, BSMX's PEG has been as high as 1.98 and as low as 0.85, with a median of 1.23.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BSMX has a P/S ratio of 1.18. This compares to its industry's average P/S of 1.69.

Finally, investors will want to recognize that BSMX has a P/CF ratio of 7. 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. BSMX's current P/CF looks attractive when compared to its industry's average P/CF of 13.92. Over the past 52 weeks, BSMX's P/CF has been as high as 9.89 and as low as 6.45, with a median of 8.22.

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


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Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) : Free Stock Analysis Report
 
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