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.
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.
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 stock to keep an eye on is Kamada (KMDA). KMDA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 16.67. This compares to its industry's average Forward P/E of 35.81. Over the past year, KMDA's Forward P/E has been as high as 26.70 and as low as 16.67, with a median of 20.60.
Another notable valuation metric for KMDA is its P/B ratio of 1.51. 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. KMDA's current P/B looks attractive when compared to its industry's average P/B of 3.13. Over the past 12 months, KMDA's P/B has been as high as 1.85 and as low as 1.16, with a median of 1.53.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. KMDA has a P/S ratio of 2.38. This compares to its industry's average P/S of 5.74.
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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