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.
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.
Fomento Economico Mexicano (FMX) is a stock many investors are watching right now. FMX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.04. This compares to its industry's average Forward P/E of 21.14. Over the past 52 weeks, FMX's Forward P/E has been as high as 25.91 and as low as 14.13, with a median of 20.19.
Investors will also notice that FMX has a PEG ratio of 1.32. 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. FMX's PEG compares to its industry's average PEG of 2.65. Over the past 52 weeks, FMX's PEG has been as high as 2.18 and as low as 1.22, with a median of 1.46.
We should also highlight that FMX has a P/B ratio of 3.76. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. FMX's current P/B looks attractive when compared to its industry's average P/B of 9.51. Over the past year, FMX's P/B has been as high as 3.98 and as low as 1.47, with a median of 1.74.
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. FMX has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.74.
Finally, we should also recognize that FMX has a P/CF ratio of 8.06. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. FMX's current P/CF looks attractive when compared to its industry's average P/CF of 22.36. Over the past year, FMX's P/CF has been as high as 15.28 and as low as 7.13, with a median of 9.77.
Value investors will likely look at more than just these metrics, but the above data helps show that Fomento Economico Mexicano is likely undervalued currently. And when considering the strength of its earnings outlook, FMX sticks out at as one of the market's strongest value stocks.
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
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