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Are Investors Undervaluing Phibro Animal Health (PAHC) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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 #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.45, which compares to its industry's average of 20.98. Over the last 12 months, PAHC's Forward P/E has been as high as 15.21 and as low as 7.98, with a median of 12.24.

Investors should also recognize that PAHC has a P/B ratio of 4.04. The P/B ratio is used to compare a stock's market value with 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 5.02. PAHC's P/B has been as high as 4.81 and as low as 2.52, with a median of 3.59, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAHC has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.39.

Value investors will likely look at more than just these metrics, but the above data helps show that Phibro Animal Health is likely undervalued currently. And when considering the strength of its earnings outlook, PAHC sticks out as one of the market's strongest value stocks.

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