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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 to watch right now is Phibro Animal Health (PAHC). PAHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.61, while its industry has an average P/E of 20.52. Over the past year, PAHC's Forward P/E has been as high as 15.21 and as low as 8.42, with a median of 12.76.
Investors should also recognize that PAHC has a P/B ratio of 2.94. 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. PAHC's current P/B looks attractive when compared to its industry's average P/B of 4.78. PAHC's P/B has been as high as 4.30 and as low as 1.87, with a median of 3.39, 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. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PAHC has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.28.
Finally, we should also recognize that PAHC has a P/CF ratio of 12.21. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 31.91. Within the past 12 months, PAHC's P/CF has been as high as 22.96 and as low as 10.14, with a median of 16.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Phibro Animal Health is likely undervalued currently. And when considering the strength of its earnings outlook, PAHC sticks out at as one of the market's strongest value stocks.
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Phibro Animal Health Corporation (PAHC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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