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Should Value Investors Buy Baxter International (BAX) 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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Baxter International (BAX - Free Report) . BAX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.67, which compares to its industry's average of 22.17. Over the past 52 weeks, BAX's Forward P/E has been as high as 14.92 and as low as 10.64, with a median of 12.17.
BAX is also sporting a PEG ratio of 1.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAX's industry has an average PEG of 2.16 right now. Over the past 52 weeks, BAX's PEG has been as high as 4.33 and as low as 1.12, with a median of 2.01.
Another notable valuation metric for BAX is its P/B ratio of 2.43. 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. This stock's P/B looks solid versus its industry's average P/B of 5.32. Within the past 52 weeks, BAX's P/B has been as high as 2.69 and as low as 1.98, with a median of 2.36.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAX has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.54.
Value investors will likely look at more than just these metrics, but the above data helps show that Baxter International is likely undervalued currently. And when considering the strength of its earnings outlook, BAX sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Baxter International (BAX) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Baxter International (BAX - Free Report) . BAX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.67, which compares to its industry's average of 22.17. Over the past 52 weeks, BAX's Forward P/E has been as high as 14.92 and as low as 10.64, with a median of 12.17.
BAX is also sporting a PEG ratio of 1.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAX's industry has an average PEG of 2.16 right now. Over the past 52 weeks, BAX's PEG has been as high as 4.33 and as low as 1.12, with a median of 2.01.
Another notable valuation metric for BAX is its P/B ratio of 2.43. 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. This stock's P/B looks solid versus its industry's average P/B of 5.32. Within the past 52 weeks, BAX's P/B has been as high as 2.69 and as low as 1.98, with a median of 2.36.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAX has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.54.
Value investors will likely look at more than just these metrics, but the above data helps show that Baxter International is likely undervalued currently. And when considering the strength of its earnings outlook, BAX sticks out at as one of the market's strongest value stocks.