Should Value Investors Buy International Game Technology (IGT) Stock?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 International Game Technology (IGT). IGT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 22.96, while its industry has an average P/E of 44.13. Over the past 52 weeks, IGT's Forward P/E has been as high as 22.96 and as low as 10.76, with a median of 15.98.
Investors should also recognize that IGT has a P/B ratio of 3.54. 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 10.24. IGT's P/B has been as high as 3.54 and as low as 1.55, with a median of 2.50, over the past year.
Investors could also keep in mind MGM Resorts International (MGM), an Gaming stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
MGM Resorts International is currently trading with a Forward P/E ratio of 23.41 while its PEG ratio sits at 8.41. Both of the company's metrics compare favorably to its industry's average P/E of 44.13 and average PEG ratio of 5.44.
MGM's price-to-earnings ratio has been as high as 270.61 and as low as 18.74, with a median of 70.02, while its PEG ratio has been as high as 14.32 and as low as 1.48, with a median of 7.86, all within the past year.
Additionally, MGM Resorts International has a P/B ratio of 3.48 while its industry's price-to-book ratio sits at 10.24. For MGM, this valuation metric has been as high as 3.48, as low as 1.73, with a median of 2.78 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that International Game Technology and MGM Resorts International are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IGT and MGM feels like a great value stock at the moment.
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International Game Technology (IGT) : Free Stock Analysis Report
MGM Resorts International (MGM) : Free Stock Analysis Report
