Yahoo Finance Should Value Investors Buy Takeda Pharmaceutical Co. (TAK) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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.
One company value investors might notice is Takeda Pharmaceutical Co. (TAK). TAK is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
We also note that TAK holds a PEG ratio of 3.71. 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. TAK's industry has an average PEG of 9.42 right now. TAK's PEG has been as high as 9.20 and as low as 3.08, with a median of 5.40, all within the past year.
Another valuation metric that we should highlight is TAK's P/B ratio of 0.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.27. Over the past year, TAK's P/B has been as high as 1.15 and as low as 0.87, with a median of 0.98.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. TAK has a P/S ratio of 1.42. This compares to its industry's average P/S of 3.21.
Finally, we should also recognize that TAK has a P/CF ratio of 6.70. 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 10.18. Within the past 12 months, TAK's P/CF has been as high as 7.53 and as low as 6.47, with a median of 6.91.
Value investors will likely look at more than just these metrics, but the above data helps show that Takeda Pharmaceutical Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, TAK sticks out at as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Takeda Pharmaceutical Co. (TAK) : Free Stock Analysis Report
