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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Harmony Biosciences (HRMY) is a stock many investors are watching right now. HRMY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
We should also highlight that HRMY has a P/B ratio of 2.42. 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 3.61. Over the past year, HRMY's P/B has been as high as 4.20 and as low as 2.23, with a median of 2.87.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. HRMY has a P/S ratio of 2.62. This compares to its industry's average P/S of 7.13.
Finally, investors will want to recognize that HRMY has a P/CF ratio of 9.34. 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. HRMY's P/CF compares to its industry's average P/CF of 9.47. Over the past 52 weeks, HRMY's P/CF has been as high as 16.61 and as low as 9.07, with a median of 11.73.
These are only a few of the key metrics included in Harmony Biosciences'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, HRMY looks like an impressive value stock at the moment.
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Harmony Biosciences Holdings, Inc. (HRMY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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