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Are Investors Undervaluing Universal Health Services (UHS) Right Now?
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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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.99, which compares to its industry's average of 13.43. Over the past 52 weeks, UHS's Forward P/E has been as high as 14.18 and as low as 7.60, with a median of 9.80.
We also note that UHS holds a PEG ratio of 0.76. 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. UHS's PEG compares to its industry's average PEG of 1.26. Within the past year, UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62.
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. UHS has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.77.
Finally, investors should note that UHS has a P/CF ratio of 6.71. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.52. Within the past 12 months, UHS's P/CF has been as high as 10.90 and as low as 5.42, with a median of 7.00.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Health Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UHS feels like a great value stock at the moment.
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Are Investors Undervaluing Universal Health Services (UHS) Right Now?
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.99, which compares to its industry's average of 13.43. Over the past 52 weeks, UHS's Forward P/E has been as high as 14.18 and as low as 7.60, with a median of 9.80.
We also note that UHS holds a PEG ratio of 0.76. 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. UHS's PEG compares to its industry's average PEG of 1.26. Within the past year, UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62.
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. UHS has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.77.
Finally, investors should note that UHS has a P/CF ratio of 6.71. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.52. Within the past 12 months, UHS's P/CF has been as high as 10.90 and as low as 5.42, with a median of 7.00.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Health Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UHS feels like a great value stock at the moment.