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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Biogen (BIIB). BIIB is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Investors will also notice that BIIB has a PEG ratio of 1.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BIIB's industry has an average PEG of 1.87 right now. Within the past year, BIIB's PEG has been as high as 1.95 and as low as 0.97, with a median of 1.49.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BIIB has a P/S ratio of 2.61. This compares to its industry's average P/S of 6.92.
Finally, we should also recognize that BIIB has a P/CF ratio of 8.24. 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. BIIB's current P/CF looks attractive when compared to its industry's average P/CF of 10.51. BIIB's P/CF has been as high as 15.50 and as low as 6.69, with a median of 7.96, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Biogen is likely undervalued currently. And when considering the strength of its earnings outlook, BIIB sticks out as one of the market's strongest value stocks.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Biogen Inc. (BIIB): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).