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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Aveanna Healthcare (AVAH) is a stock many investors are watching right now. AVAH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 17.55, while its industry has an average P/E of 17.67. Over the past 52 weeks, AVAH's Forward P/E has been as high as 296.02 and as low as -1,528.95, with a median of 46.39.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AVAH has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.25.
DaVita (DVA) may be another strong Medical - Outpatient and Home Healthcare stock to add to your shortlist. DVA is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.
Shares of DaVita are currently trading at a forward earnings multiple of 10.65 and a PEG ratio of 0.83 compared to its industry's P/E and PEG ratios of 17.67 and 1.37, respectively.
DVA's price-to-earnings ratio has been as high as 15.44 and as low as 10.48, with a median of 13.17, while its PEG ratio has been as high as 1.09 and as low as 0.69, with a median of 0.87, all within the past year.
Additionally, DaVita has a P/B ratio of -91.02 while its industry's price-to-book ratio sits at 4.35. For DVA, this valuation metric has been as high as 36.74, as low as -1,824.32, with a median of 16.92 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Aveanna Healthcare and DaVita are likely undervalued currently. And when considering the strength of its earnings outlook, AVAH and DVA sticks out as one of the market's strongest value stocks.
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Aveanna Healthcare Holdings Inc. (AVAH): Free Stock Analysis Report
DaVita Inc. (DVA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).