The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 company value investors might notice is Phibro Animal Health (PAHC). PAHC is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.26, which compares to its industry's average of 20.71. Over the past 52 weeks, PAHC's Forward P/E has been as high as 15.21 and as low as 7.98, with a median of 12.28.
Another valuation metric that we should highlight is PAHC's P/B ratio of 4.66. 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. PAHC's current P/B looks attractive when compared to its industry's average P/B of 5.09. Over the past 12 months, PAHC's P/B has been as high as 4.81 and as low as 2.52, with a median of 3.55.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAHC has a P/S ratio of 1.04. This compares to its industry's average P/S of 1.47.
These are just a handful of the figures considered in Phibro Animal Health'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 PAHC is an impressive value stock right now.
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Phibro Animal Health Corporation (PAHC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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