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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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Santander Mexico (BSMX). BSMX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.25, which compares to its industry's average of 10.92. BSMX's Forward P/E has been as high as 9.49 and as low as 3.67, with a median of 7.08, all within the past year.
We should also highlight that BSMX has a P/B ratio of 0.94. 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 attractive against its industry's average P/B of 0.97. Over the past 12 months, BSMX's P/B has been as high as 1.11 and as low as 0.48, with a median of 0.70.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BSMX has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.75.
Finally, we should also recognize that BSMX has a P/CF ratio of 5.51. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BSMX's P/CF compares to its industry's average P/CF of 13.73. Over the past 52 weeks, BSMX's P/CF has been as high as 6.26 and as low as 2.47, with a median of 3.83.
Value investors will likely look at more than just these metrics, but the above data helps show that Santander Mexico is likely undervalued currently. And when considering the strength of its earnings outlook, BSMX sticks out at as one of the market's strongest value stocks.
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Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) : Free Stock Analysis Report
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