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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Merchants Bancorp (MBIN) is a stock many investors are watching right now. MBIN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.39. This compares to its industry's average Forward P/E of 11.98. Over the past year, MBIN's Forward P/E has been as high as 10.71 and as low as 7.12, with a median of 8.86.
We should also highlight that MBIN has a P/B ratio of 1.26. The P/B ratio pits a stock's market value against 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 1.47. MBIN's P/B has been as high as 1.83 and as low as 1.06, with a median of 1.27, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. MBIN has a P/S ratio of 2.05. This compares to its industry's average P/S of 2.53.
Finally, investors will want to recognize that MBIN has a P/CF ratio of 6.75. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.86. MBIN's P/CF has been as high as 12.10 and as low as 6.62, with a median of 8.11, all within the past year.
These are just a handful of the figures considered in Merchants Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MBIN is an impressive value stock right now.
Merchants Bancorp (MBIN): Free Stock Analysis Report
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