Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 Marathon Petroleum (MPC). MPC is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is MPC’s P/B ratio of 2.45. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. MPC’s current P/B looks attractive when compared to its industry’s average P/B of 5.60. MPC’s P/B has been as high as 2.45 and as low as 1.60, with a median of 2.06, over the past year.
Finally, investors will want to recognize that MPC has a P/CF ratio of 10.51. This figure highlights a company’s operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MPC’s current P/CF looks attractive when compared to its industry’s average P/CF of 12.06. MPC’s P/CF has been as high as 10.51 and as low as 5.42, with a median of 7.23, all within the past year.
These are only a few of the key metrics included in Marathon Petroleum’s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MPC looks like an impressive value stock at the moment.
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This article originally published on Zacks Investment Research (zacks.com).
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
