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 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.
One company value investors might notice is Phibro Animal Health (PAHC). PAHC is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 15.37, while its industry has an average P/E of 16.23. Over the last 12 months, 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 industry has an average PEG of 1.82 right now. Over the past 52 weeks, PAHC's PEG has been as high as 1.74 and as low as 0.30, with a median of 0.50.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAHC has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.58.
These are only a few of the key metrics included in Phibro Animal Health'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, PAHC looks like an impressive value stock at the moment.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>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
Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).