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Are Investors Undervaluing Matson (MATX) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Matson (MATX). MATX is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.93, which compares to its industry's average of 15.52. Over the last 12 months, MATX's Forward P/E has been as high as 22.26 and as low as 8.72, with a median of 11.87.

We should also highlight that MATX has a P/B ratio of 2.91. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 5.52. Over the past 12 months, MATX's P/B has been as high as 3.47 and as low as 2.31, with a median of 2.80.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MATX has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.22.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Matson is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MATX feels like a great value stock at the moment.


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