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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Harmony Biosciences (HRMY) is a stock many investors are watching right now. HRMY is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.
Another valuation metric that we should highlight is HRMY's P/B ratio of 2.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.63. 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 frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HRMY has a P/S ratio of 2.57. This compares to its industry's average P/S of 7.1.
Finally, investors should note that HRMY has a P/CF ratio of 9.34. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. HRMY's P/CF compares to its industry's average P/CF of 9.69. Over the past year, 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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