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Are Investors Undervaluing These Medical Stocks Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Laboratory Corp. of America (LH - Free Report) is a stock many investors are watching right now. LH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 16.71, which compares to its industry's average of 19.14. Over the past 52 weeks, LH's Forward P/E has been as high as 16.71 and as low as 10.62, with a median of 13.73.
We also note that LH holds a PEG ratio of 1.58. 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. LH's PEG compares to its industry's average PEG of 1.81. Over the past 52 weeks, LH's PEG has been as high as 1.58 and as low as 1.05, with a median of 1.30.
We should also highlight that LH has a P/B ratio of 2.71. The P/B ratio is used to compare a stock's market value with 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 6.06. Over the past 12 months, LH's P/B has been as high as 2.94 and as low as 2.12, with a median of 2.58.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. LH has a P/S ratio of 1.72. This compares to its industry's average P/S of 2.06.
Investors could also keep in mind McKesson (MCK - Free Report) , an Medical - Dental Supplies stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of McKesson currently holds a Forward P/E ratio of 10.19, and its PEG ratio is 1.14. In comparison, its industry sports average P/E and PEG ratios of 19.14 and 1.81.
Over the last 12 months, MCK's P/E has been as high as 11.27, as low as 9.17, with a median of 10.04, and its PEG ratio has been as high as 1.73, as low as 1.09, with a median of 1.41.
Additionally, McKesson has a P/B ratio of -394.11 while its industry's price-to-book ratio sits at 6.06. For MCK, this valuation metric has been as high as 184.34, as low as -717.21, with a median of -105.97 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Laboratory Corp. of America and McKesson are likely undervalued currently. And when considering the strength of its earnings outlook, LH and MCK sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing These Medical Stocks Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Laboratory Corp. of America (LH - Free Report) is a stock many investors are watching right now. LH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 16.71, which compares to its industry's average of 19.14. Over the past 52 weeks, LH's Forward P/E has been as high as 16.71 and as low as 10.62, with a median of 13.73.
We also note that LH holds a PEG ratio of 1.58. 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. LH's PEG compares to its industry's average PEG of 1.81. Over the past 52 weeks, LH's PEG has been as high as 1.58 and as low as 1.05, with a median of 1.30.
We should also highlight that LH has a P/B ratio of 2.71. The P/B ratio is used to compare a stock's market value with 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 6.06. Over the past 12 months, LH's P/B has been as high as 2.94 and as low as 2.12, with a median of 2.58.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. LH has a P/S ratio of 1.72. This compares to its industry's average P/S of 2.06.
Investors could also keep in mind McKesson (MCK - Free Report) , an Medical - Dental Supplies stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of McKesson currently holds a Forward P/E ratio of 10.19, and its PEG ratio is 1.14. In comparison, its industry sports average P/E and PEG ratios of 19.14 and 1.81.
Over the last 12 months, MCK's P/E has been as high as 11.27, as low as 9.17, with a median of 10.04, and its PEG ratio has been as high as 1.73, as low as 1.09, with a median of 1.41.
Additionally, McKesson has a P/B ratio of -394.11 while its industry's price-to-book ratio sits at 6.06. For MCK, this valuation metric has been as high as 184.34, as low as -717.21, with a median of -105.97 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Laboratory Corp. of America and McKesson are likely undervalued currently. And when considering the strength of its earnings outlook, LH and MCK sticks out as one of the market's strongest value stocks.