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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
Phibro Animal Health (PAHC) is a stock many investors are watching right now. PAHC is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.37, while its industry has an average P/E of 19.88. Over the past year, PAHC's Forward P/E has been as high as 16.56 and as low as 7.98, with a median of 12.28.
PAHC is also sporting a PEG ratio of 1.20. 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. PAHC's PEG compares to its industry's average PEG of 1.65. PAHC's PEG has been as high as 1.74 and as low as 0.30, with a median of 0.50, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAHC has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Phibro Animal Health is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAHC feels like a great value stock at the moment.
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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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