Yahoo Finance Are Investors Undervaluing Phibro Animal Health (PAHC) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Phibro Animal Health (PAHC). PAHC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.36. This compares to its industry's average Forward P/E of 22.52. Over the last 12 months, PAHC's Forward P/E has been as high as 14.16 and as low as 9.13, with a median of 11.76.
Another notable valuation metric for PAHC is its P/B ratio of 2.30. The P/B is a method of comparing a stock's market value to 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 4.70. Within the past 52 weeks, PAHC's P/B has been as high as 3.12 and as low as 1.86, with a median of 2.33.
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. PAHC has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.67.
Finally, we should also recognize that PAHC has a P/CF ratio of 8.73. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.78. Within the past 12 months, PAHC's P/CF has been as high as 9.93 and as low as 6.07, with a median of 8.32.
If you're looking for another solid Medical - Products value stock, take a look at Smith & Nephew SNATS (SNN). SNN is a # 2 (Buy) stock with a Value score of A.
Shares of Smith & Nephew SNATS currently holds a Forward P/E ratio of 17.50, and its PEG ratio is 2.09. In comparison, its industry sports average P/E and PEG ratios of 22.52 and 2.67.
SNN's price-to-earnings ratio has been as high as 18.60 and as low as 12.80, with a median of 15.82, while its PEG ratio has been as high as 3.26 and as low as 1.75, with a median of 2.17, all within the past year.
Smith & Nephew SNATS also has a P/B ratio of 2.47 compared to its industry's price-to-book ratio of 4.70. Over the past year, its P/B ratio has been as high as 2.64, as low as 1.77, with a median of 2.23.
Value investors will likely look at more than just these metrics, but the above data helps show that Phibro Animal Health and Smith & Nephew SNATS are likely undervalued currently. And when considering the strength of its earnings outlook, PAHC and SNN sticks out as one of the market's strongest value stocks.
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Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
Smith & Nephew SNATS, Inc. (SNN) : Free Stock Analysis Report
