Is The Marcus (MCS) Stock Undervalued Right Now?

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 to watch right now is The Marcus (MCS). MCS is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MCS has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.2.

Finally, investors will want to recognize that MCS has a P/CF ratio of 5.70. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.71. MCS's P/CF has been as high as 12.94 and as low as 5.33, with a median of 9.24, all within the past year.

These are only a few of the key metrics included in The Marcus'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, MCS looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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