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Are Investors Undervaluing GlaxoSmithKline (GSK) Right Now?
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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
GlaxoSmithKline (GSK - Free Report) is a stock many investors are watching right now. GSK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.52, while its industry has an average P/E of 15. Over the past 52 weeks, GSK's Forward P/E has been as high as 15.37 and as low as 10.51, with a median of 14.16.
Investors should also recognize that GSK has a P/B ratio of 4.09. 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 solid versus its industry's average P/B of 6.69. Within the past 52 weeks, GSK's P/B has been as high as 27.58 and as low as 3.39, with a median of 4.63.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. GSK has a P/S ratio of 2.31. This compares to its industry's average P/S of 4.47.
Finally, our model also underscores that GSK has a P/CF ratio of 13.19. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.31. Within the past 12 months, GSK's P/CF has been as high as 13.65 and as low as 8.86, with a median of 11.98.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GlaxoSmithKline is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GSK feels like a great value stock at the moment.
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Are Investors Undervaluing GlaxoSmithKline (GSK) Right Now?
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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
GlaxoSmithKline (GSK - Free Report) is a stock many investors are watching right now. GSK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.52, while its industry has an average P/E of 15. Over the past 52 weeks, GSK's Forward P/E has been as high as 15.37 and as low as 10.51, with a median of 14.16.
Investors should also recognize that GSK has a P/B ratio of 4.09. 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 solid versus its industry's average P/B of 6.69. Within the past 52 weeks, GSK's P/B has been as high as 27.58 and as low as 3.39, with a median of 4.63.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. GSK has a P/S ratio of 2.31. This compares to its industry's average P/S of 4.47.
Finally, our model also underscores that GSK has a P/CF ratio of 13.19. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.31. Within the past 12 months, GSK's P/CF has been as high as 13.65 and as low as 8.86, with a median of 11.98.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GlaxoSmithKline is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GSK feels like a great value stock at the moment.