The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Universal Health Services (UHS). UHS is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.83 right now. For comparison, its industry sports an average P/E of 11.27. Over the past year, UHS's Forward P/E has been as high as 14.18 and as low as 7.60, with a median of 9.66.
Investors will also notice that UHS has a PEG ratio of 0.74. 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. UHS's PEG compares to its industry's average PEG of 1.20. UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62, all within the past year.
Another notable valuation metric for UHS is its P/B ratio of 1.73. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. UHS's current P/B looks attractive when compared to its industry's average P/B of 3.46. Within the past 52 weeks, UHS's P/B has been as high as 2.47 and as low as 1.42, with a median of 1.75.
These are only a few of the key metrics included in Universal Health Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UHS looks like an impressive value stock at the moment.
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Universal Health Services, Inc. (UHS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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