Should Value Investors Buy Kamada (KMDA) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 a Value grade of A. The stock is trading with a P/E ratio of 16.85, which compares to its industry's average of 37.19. Over the last 12 months, KMDA's Forward P/E has been as high as 26.70 and as low as 16.67, with a median of 20.60.

Investors should also recognize that KMDA has a P/B ratio of 1.53. 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. This stock's P/B looks attractive against its industry's average P/B of 3.40. 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 1.53.

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 2.31. This compares to its industry's average P/S of 6.43.

Value investors will likely look at more than just these metrics, but the above data helps show that Kamada is likely undervalued currently. And when considering the strength of its earnings outlook, KMDA sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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