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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is The Marcus (MCS). MCS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
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 0.72. This compares to its industry's average P/S of 0.99.
Finally, investors should note that MCS has a P/CF ratio of 8.39. 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. MCS's P/CF compares to its industry's average P/CF of 12.61. Over the past 52 weeks, MCS's P/CF has been as high as 12.94 and as low as 3.93, with a median of 9.02.
Value investors will likely look at more than just these metrics, but the above data helps show that The Marcus is likely undervalued currently. And when considering the strength of its earnings outlook, MCS sticks out at as one of the market's strongest value stocks.
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Marcus Corporation (The) (MCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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