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Are Investors Undervaluing Banco Macro (BMA) Right Now?


Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Banco Macro (BMA) is a stock many investors are watching right now. BMA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.57, which compares to its industry’s average of 9.81. Over the past 52 weeks, BMA’s Forward P/E has been as high as 10.86 and as low as 3.37, with a median of 6.72.

We also note that BMA holds a PEG ratio of 0.55. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. BMA’s PEG compares to its industry’s average PEG of 1.20. BMA’s PEG has been as high as 1.93 and as low as 0.25, with a median of 0.49, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. BMA has a P/S ratio of 1.57. This compares to its industry’s average P/S of 1.83.

Finally, investors should note that BMA has a P/CF ratio of 6.07. 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. BMA’s P/CF compares to its industry’s average P/CF of 12.98. Within the past 12 months, BMA’s P/CF has been as high as 13.45 and as low as 3.50, with a median of 6.09.

These are only a few of the key metrics included in Banco Macro’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, BMA looks like an impressive value stock at the moment.

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