Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Catalyst Pharmaceuticals (CPRX). CPRX is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.
Investors should also note that CPRX holds a PEG ratio of 0.72. 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. CPRX's PEG compares to its industry's average PEG of 1.76. CPRX's PEG has been as high as 3.40 and as low as 0.63, with a median of 1.06, all within the past year.
Finally, our model also underscores that CPRX has a P/CF ratio of 10.23. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.44. CPRX's P/CF has been as high as 25.41 and as low as 10.16, with a median of 13.48, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Catalyst Pharmaceuticals is likely undervalued currently. And when considering the strength of its earnings outlook, CPRX sticks out as one of the market's strongest value stocks.
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Catalyst Pharmaceuticals, Inc. (CPRX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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