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Are Investors Undervaluing Encompass Health (EHC) 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, 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.
Encompass Health (EHC - Free Report) is a stock many investors are watching right now. EHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 19.44. This compares to its industry's average Forward P/E of 21.16. Over the last 12 months, EHC's Forward P/E has been as high as 20.79 and as low as 16.27, with a median of 19.
EHC is also sporting a PEG ratio of 1.24. 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. EHC's industry has an average PEG of 1.70 right now. Over the past 52 weeks, EHC's PEG has been as high as 1.77 and as low as 1.20, with a median of 1.38.
Another valuation metric that we should highlight is EHC's P/B ratio of 3.56. 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 3.97. Within the past 52 weeks, EHC's P/B has been as high as 3.71 and as low as 2.83, with a median of 3.33.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Encompass Health is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EHC feels like a great value stock at the moment.
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Are Investors Undervaluing Encompass Health (EHC) 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, 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.
Encompass Health (EHC - Free Report) is a stock many investors are watching right now. EHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 19.44. This compares to its industry's average Forward P/E of 21.16. Over the last 12 months, EHC's Forward P/E has been as high as 20.79 and as low as 16.27, with a median of 19.
EHC is also sporting a PEG ratio of 1.24. 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. EHC's industry has an average PEG of 1.70 right now. Over the past 52 weeks, EHC's PEG has been as high as 1.77 and as low as 1.20, with a median of 1.38.
Another valuation metric that we should highlight is EHC's P/B ratio of 3.56. 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 3.97. Within the past 52 weeks, EHC's P/B has been as high as 3.71 and as low as 2.83, with a median of 3.33.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Encompass Health is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EHC feels like a great value stock at the moment.