Back to top

Image: Bigstock

Should Value Investors Buy Phibro Animal Health (PAHC) Stock?

Read MoreHide Full Article

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Phibro Animal Health (PAHC - Free Report) . PAHC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 12.62, while its industry has an average P/E of 21.06. Over the past year, PAHC's Forward P/E has been as high as 15.18 and as low as 8.01, with a median of 10.60.

Another notable valuation metric for PAHC is its P/B ratio of 2.77. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.96. PAHC's P/B has been as high as 2.86 and as low as 1.42, with a median of 1.89, over the past year.

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. PAHC has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.48.

Finally, investors will want to recognize that PAHC has a P/CF ratio of 15.04. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. PAHC's current P/CF looks attractive when compared to its industry's average P/CF of 36.19. PAHC's P/CF has been as high as 15.52 and as low as 6.93, with a median of 9.74, all within the past year.

These are just a handful of the figures considered in Phibro Animal Health's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PAHC is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Phibro Animal Health Corporation (PAHC) - free report >>

Published in