Should Value Investors Buy Fresenius (FMS) Stock?

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One stock to keep an eye on is Fresenius (FMS). FMS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 17.56 right now. For comparison, its industry sports an average P/E of 40.89. Over the past 52 weeks, FMS's Forward P/E has been as high as 17.79 and as low as 10.57, with a median of 13.93.

Investors will also notice that FMS has a PEG ratio of 2.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FMS's industry currently sports an average PEG of 3.42. Over the past 52 weeks, FMS's PEG has been as high as 3.69 and as low as 2, with a median of 2.37.

We should also highlight that FMS has a P/B ratio of 1.80. The P/B ratio pits a stock's market value against 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 4.08. Over the past 12 months, FMS's P/B has been as high as 1.80 and as low as 1.18, with a median of 1.48.

Finally, investors will want to recognize that FMS has a P/CF ratio of 8.31. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 24.60. Over the past 52 weeks, FMS's P/CF has been as high as 8.71 and as low as 5.59, with a median of 7.50.

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

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