Should Value Investors Buy The Marcus (MCS) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 stock to keep an eye on is The Marcus (MCS). MCS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is MCS's P/B ratio of 1.07. 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. This stock's P/B looks attractive against its industry's average P/B of 3.02. MCS's P/B has been as high as 1.27 and as low as 0.96, with a median of 1.07, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MCS has a P/S ratio of 0.7. This compares to its industry's average P/S of 0.99.
Target Hospitality (TH) may be another strong Leisure and Recreation Services stock to add to your shortlist. TH is a # 2 (Buy) stock with a Value grade of A.
Shares of Target Hospitality are currently trading at a forward earnings multiple of 14.21 and a PEG ratio of 0.95 compared to its industry's P/E and PEG ratios of 17.85 and 1.11, respectively.
TH's price-to-earnings ratio has been as high as 15.85 and as low as 5.67, with a median of 9.60, while its PEG ratio has been as high as 1.06 and as low as 0.38, with a median of 0.64, all within the past year.
Additionally, Target Hospitality has a P/B ratio of 5.73 while its industry's price-to-book ratio sits at 3.02. For TH, this valuation metric has been as high as 10.96, as low as 4.29, with a median of 6.55 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that The Marcus and Target Hospitality are likely undervalued currently. And when considering the strength of its earnings outlook, MCS and TH sticks out as one of the market's strongest value stocks.
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Marcus Corporation (The) (MCS) : Free Stock Analysis Report
Target Hospitality Corp. (TH) : Free Stock Analysis Report
