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Should Value Investors Buy MasterCraft Boat Holdings, Inc. (MCFT) Stock?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is MasterCraft Boat Holdings, Inc. (MCFT). MCFT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that MCFT has a P/B ratio of 3.71. 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 5.08. MCFT's P/B has been as high as 8.53 and as low as 3.20, with a median of 5.18, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MCFT has a P/S ratio of 0.63. This compares to its industry's average P/S of 1.2.

Finally, investors will want to recognize that MCFT has a P/CF ratio of 9.75. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 28.45. Within the past 12 months, MCFT's P/CF has been as high as 13.20 and as low as 6.72, with a median of 8.85.

Value investors will likely look at more than just these metrics, but the above data helps show that MasterCraft Boat Holdings, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, MCFT sticks out at as one of the market's strongest value stocks.


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