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 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 company to watch right now is Universal Health Services (UHS). UHS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.83. This compares to its industry's average Forward P/E of 11.09. 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 should also note that UHS holds a PEG ratio of 0.74. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UHS's industry currently sports an average PEG of 1.18. Over the past 52 weeks, UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62.
We should also highlight that UHS has a P/B ratio of 1.73. 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. UHS's current P/B looks attractive when compared to its industry's average P/B of 3.24. 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.
Finally, investors will want to recognize that UHS has a P/CF ratio of 6.60. 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. UHS's current P/CF looks attractive when compared to its industry's average P/CF of 7.54. Within the past 12 months, UHS's P/CF has been as high as 10.90 and as low as 5.42, with a median of 6.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Health Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UHS feels like a great 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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