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.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Kamada (KMDA). KMDA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 17.23, while its industry has an average P/E of 36.32. Over the past year, KMDA's Forward P/E has been as high as 26.70 and as low as 17.15, with a median of 20.60.
Another notable valuation metric for KMDA is its P/B ratio of 1.55. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.08. Within the past 52 weeks, KMDA's P/B has been as high as 1.85 and as low as 1.16, with a median of 1.52.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. KMDA has a P/S ratio of 2.35. This compares to its industry's average P/S of 5.57.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Kamada is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMDA feels like a great value stock at the moment.
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Kamada Ltd. (KMDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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