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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with “A” grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Melco Resorts & Entertainment Limited (MLCO) is a stock many investors are watching right now. MLCO is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 14.24, while its industry has an average P/E of 33.60. Over the past 52 weeks, MLCO’s Forward P/E has been as high as 38.28 and as low as 13.21, with a median of 18.39.
Investors will also notice that MLCO has a PEG ratio of 0.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. MLCO’s industry has an average PEG of 1.46 right now. Within the past year, MLCO’s PEG has been as high as 1.11 and as low as 0.38, with a median of 0.49.
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. MLCO has a P/S ratio of 0.82. This compares to its industry’s average P/S of 1.41.
These are only a few of the key metrics included in Melco Resorts & Entertainment Limited’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, MLCO looks like an impressive value stock at the moment.
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Melco Resorts & Entertainment Limited (MLCO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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