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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Mistras Group (MG). MG is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.37. This compares to its industry's average Forward P/E of 25.14. Over the past year, MG's Forward P/E has been as high as 13.78 and as low as 8.93, with a median of 11.00.
MG is also sporting a PEG ratio of 0.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MG's industry currently sports an average PEG of 1.76. Over the last 12 months, MG's PEG has been as high as 0.86 and as low as 0.56, with a median of 0.68.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MG has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.56.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Mistras Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MG feels like a great value stock at the moment.
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Mistras Group Inc (MG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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