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Should Value Investors Buy Fresenius Medical Care AG & Co. (FMS) Stock?

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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.

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 Fresenius Medical Care AG & Co. (FMS - Free Report) . FMS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.87. This compares to its industry's average Forward P/E of 26.28. Over the last 12 months, FMS's Forward P/E has been as high as 14.62 and as low as 10.46, with a median of 11.79.

We also note that FMS holds a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FMS's PEG compares to its industry's average PEG of 2.10. FMS's PEG has been as high as 1.15 and as low as 0.71, with a median of 0.91, all within the past year.

Finally, we should also recognize that FMS has a P/CF ratio of 5.55. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 19.99. Within the past 12 months, FMS's P/CF has been as high as 6.06 and as low as 4.28, with a median of 5.02.

Value investors will likely look at more than just these metrics, but the above data helps show that Fresenius Medical Care AG & Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, FMS sticks out at as one of the market's strongest value stocks.


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