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Should Value Investors Buy Banco Macro (BMA) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Banco Macro (BMA). BMA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 5.89 right now. For comparison, its industry sports an average P/E of 9.19. Over the past year, BMA's Forward P/E has been as high as 12.79 and as low as 3.37, with a median of 6.88.

We also note that BMA holds a PEG ratio of 0.43. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BMA's industry has an average PEG of 1.02 right now. Within the past year, BMA's PEG has been as high as 2.69 and as low as 0.25, with a median of 0.50.

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. BMA has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.56.

Finally, investors should note that BMA has a P/CF ratio of 4.40. 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. BMA's current P/CF looks attractive when compared to its industry's average P/CF of 12.54. Within the past 12 months, BMA's P/CF has been as high as 15.79 and as low as 3.50, with a median of 7.57.

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


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