Should Value Investors Buy MGIC Investment (MTG) 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.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 MGIC Investment (MTG). MTG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.07 right now. For comparison, its industry sports an average P/E of 8.77. Over the past year, MTG's Forward P/E has been as high as 7.09 and as low as 4.53, with a median of 6.05.
Investors should also recognize that MTG has a P/B ratio of 0.96. The P/B ratio is used to compare a stock's market value with 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 2.28. Over the past year, MTG's P/B has been as high as 1.03 and as low as 0.79, with a median of 0.88.
Finally, investors should note that MTG has a P/CF ratio of 5.27. 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. MTG's P/CF compares to its industry's average P/CF of 9.66. MTG's P/CF has been as high as 5.96 and as low as 4.04, with a median of 4.64, all within the past year.
Investors could also keep in mind Mnchener RckversicherungsGesellschaft (MURGY), an Insurance - Multi line stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Mnchener RckversicherungsGesellschaft is currently trading with a Forward P/E ratio of 10.01 while its PEG ratio sits at 2.26. Both of the company's metrics compare favorably to its industry's average P/E of 8.77 and average PEG ratio of 0.77.
MURGY's price-to-earnings ratio has been as high as 13.63 and as low as 7.92, with a median of 10.11, while its PEG ratio has been as high as 2.28 and as low as 0.46, with a median of 0.53, all within the past year.
Furthermore, Mnchener RckversicherungsGesellschaft holds a P/B ratio of 2.04 and its industry's price-to-book ratio is 2.28. MURGY's P/B has been as high as 2.10, as low as 1.21, with a median of 1.82 over the past 12 months.
These are only a few of the key metrics included in MGIC Investment and Mnchener RckversicherungsGesellschaft strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MTG and MURGY look like an impressive value stock at the moment.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
M?nchener R?ckversicherungs-Gesellschaft (MURGY) : Free Stock Analysis Report
