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Should Value Investors Buy Puma Biotechnology (PBYI) Stock?

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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.

Puma Biotechnology (PBYI - Free Report) is a stock many investors are watching right now. PBYI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that PBYI has a P/B ratio of 3.46. 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. PBYI's current P/B looks attractive when compared to its industry's average P/B of 4.60. PBYI's P/B has been as high as 6.59 and as low as 2.74, with a median of 4.62, over the past year.

Finally, investors will want to recognize that PBYI has a P/CF ratio of 6.55. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PBYI's P/CF compares to its industry's average P/CF of 17.24. PBYI's P/CF has been as high as 24.91 and as low as 5.23, with a median of 8.74, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Puma Biotechnology is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PBYI feels like a great value stock at the moment.


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