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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Teleflex (TFX) is a stock many investors are watching right now. TFX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Investors should also note that TFX holds a PEG ratio of 1.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TFX's PEG compares to its industry's average PEG of 2.26. Over the past 52 weeks, TFX's PEG has been as high as 2.09 and as low as 1.27, with a median of 1.73.
Another valuation metric that we should highlight is TFX's P/B ratio of 1.38. 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. TFX's current P/B looks attractive when compared to its industry's average P/B of 3.67. TFX's P/B has been as high as 2.56 and as low as 1.14, with a median of 1.51, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TFX has a P/S ratio of 1.89. This compares to its industry's average P/S of 2.57.
Finally, we should also recognize that TFX has a P/CF ratio of 8.29. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. TFX's current P/CF looks attractive when compared to its industry's average P/CF of 20.58. Over the past year, TFX's P/CF has been as high as 22.89 and as low as 6.87, with a median of 10.99.
These are just a handful of the figures considered in Teleflex'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 TFX is an impressive value stock right now.
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Teleflex Incorporated (TFX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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