Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Option Care Health (OPCH). OPCH is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 15.09 right now. For comparison, its industry sports an average P/E of 18.05. OPCH's Forward P/E has been as high as 25.75 and as low as 14.74, with a median of 18.54, all within the past year.
We should also highlight that OPCH has a P/B ratio of 3.38. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.55. OPCH's P/B has been as high as 4.27 and as low as 2.59, with a median of 3.66, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OPCH has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.43.
Finally, investors should note that OPCH has a P/CF ratio of 15.67. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 31.99. Over the past year, OPCH's P/CF has been as high as 21.37 and as low as 13.58, with a median of 18.42.
Value investors will likely look at more than just these metrics, but the above data helps show that Option Care Health is likely undervalued currently. And when considering the strength of its earnings outlook, OPCH sticks out as one of the market's strongest value stocks.
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Option Care Health, Inc. (OPCH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).