Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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.
One stock to keep an eye on is Bristol Myers Squibb (BMY – Free Report) . BMY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that BMY has a PEG ratio of 2.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. BMY’s PEG compares to its industry’s average PEG of 4.68. Over the last 12 months, BMY’s PEG has been as high as 3.81 and as low as 1.36, with a median of 2.03.
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. BMY has a P/S ratio of 2.47. This compares to its industry’s average P/S of 6.31.
Another great Medical – Biomedical and Genetics stock you could consider is Puma Biotechnology (PBYI – Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Puma Biotechnology is trading at a forward earnings multiple of 5.71 at the moment, with a PEG ratio of 1.38. This compares to its industry’s average P/E of 66.99 and average PEG ratio of 4.68.
PBYI’s price-to-earnings ratio has been as high as 11.38 and as low as 4.71, with a median of 7.18, while its PEG ratio has been as high as 1.86 and as low as 0.96, with a median of 1.47, all within the past year.
Puma Biotechnology also has a P/B ratio of 2.08 compared to its industry’s price-to-book ratio of 3.51. Over the past year, its P/B ratio has been as high as 6.59, as low as 1.67, with a median of 3.65.
These are just a handful of the figures considered in Bristol Myers Squibb and Puma Biotechnology’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 BMY and PBYI is an impressive value stock right now.
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