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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One company to watch right now is Universal Health Services (UHS). UHS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.03, which compares to its industry's average of 11.12. UHS's Forward P/E has been as high as 14.67 and as low as 8.03, with a median of 12.01, all within the past year.
UHS is also sporting a PEG ratio of 0.48. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UHS's industry currently sports an average PEG of 1.01. Within the past year, UHS's PEG has been as high as 0.93 and as low as 0.48, with a median of 0.66.
Value investors will likely look at more than just these metrics, but the above data helps show that Universal Health Services is likely undervalued currently. And when considering the strength of its earnings outlook, UHS sticks out at as one of the market's strongest value stocks.
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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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