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Are Investors Undervaluing Medallion Financial (MFIN) Right Now?

Zacks Equity Research
·2 min read

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Medallion Financial (MFIN). MFIN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 3.89 right now. For comparison, its industry sports an average P/E of 7.40. Over the last 12 months, MFIN's Forward P/E has been as high as 7.31 and as low as 3.41, with a median of 5.31.

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Another valuation metric that we should highlight is MFIN's P/B ratio of 0.41. 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. This stock's P/B looks solid versus its industry's average P/B of 0.87. Over the past year, MFIN's P/B has been as high as 0.59 and as low as 0.36, with a median of 0.47.

These are just a handful of the figures considered in Medallion Financial'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 MFIN is an impressive value stock right now.

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Medallion Financial Corp. (MFIN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research