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 #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.45, while its industry has an average P/E of 20.98. Over the last 12 months, PAHC's Forward P/E has been as high as 15.21 and as low as 7.98, with a median of 12.24.
We should also highlight that PAHC has a P/B ratio of 4.04. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 5.02. PAHC's P/B has been as high as 4.81 and as low as 2.52, with a median of 3.59, over the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAHC has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.39.
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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