Should Value Investors Buy Mylan (MYL) Stock?

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.

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

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Mylan (MYL) is a stock many investors are watching right now. MYL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 4.92. This compares to its industry's average Forward P/E of 9.20. Over the past 52 weeks, MYL's Forward P/E has been as high as 6.47 and as low as 3.83, with a median of 4.45.

MYL is also sporting a PEG ratio of 1.13. 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. MYL's industry currently sports an average PEG of 1.14. Over the last 12 months, MYL's PEG has been as high as 1.19 and as low as 0.78, with a median of 0.96.

We should also highlight that MYL has a P/B ratio of 1. 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 1.32. Within the past 52 weeks, MYL's P/B has been as high as 1.36 and as low as 0.73, with a median of 0.87.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MYL has a P/S ratio of 0.99. This compares to its industry's average P/S of 2.95.

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

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