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Should Value Investors Buy Phibro Animal Health (PAHC) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Phibro Animal Health (PAHC - Free Report) . PAHC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 14.65 right now. For comparison, its industry sports an average P/E of 22.25. Over the past 52 weeks, PAHC's Forward P/E has been as high as 15.18 and as low as 8.01, with a median of 10.89.

We also note that PAHC holds a PEG ratio of 1.69. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PAHC's PEG compares to its industry's average PEG of 2.19. Over the past 52 weeks, PAHC's PEG has been as high as 6.24 and as low as 1.51, with a median of 4.36.

We should also highlight that PAHC has a P/B ratio of 3.47. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. PAHC's current P/B looks attractive when compared to its industry's average P/B of 5.36. Within the past 52 weeks, PAHC's P/B has been as high as 3.54 and as low as 1.42, with a median of 1.93.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 0.88. This compares to its industry's average P/S of 1.48.

Finally, our model also underscores that PAHC has a P/CF ratio of 22.53. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 37.95. Over the past 52 weeks, PAHC's P/CF has been as high as 22.96 and as low as 6.93, with a median of 10.36.

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.


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