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Here's Why Masimo (MASI) is a Suitable Value Pick for Now
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The popularity of value investment is growing by leaps and bounds, primarily because it is one of the favorite investing mantras followed by successful investors. As per a recent Forbes article, shares of value investment guru Warren Buffett’s conglomerate Berkshire Hathaway increased 20% in 2016, boosting his personal fortune by $12.3 billion (more than any other billionaire in the United States) to $74.2 billion.
If investors are looking for safe and profitable stocks, value stocks are probably the right option. Value strategy helps us find stocks that offer tantalizing discounts when compared to fair value.
The screening of such stocks requires the assessment of several key metrics and financial ratios. These metrics help us distinguish stocks which are overvalued, rightly lowly valued, temporarily undervalued and the ones which are poised scaled higher. Our Value Style Scorewarns investors against ‘value traps’ and helps them to find stocks that are actually trading cheap.
Our latest style score system has made the task of choosing a suitable value stock much simpler.Our research shows that stocks with a Value Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential.
Fortunately for investors looking for this combination, we have identified a potential candidate which may prove to be an impressive value pick — Masimo Corporation (MASI - Free Report) . The stock has a favorable Zacks Rank #2 and a Value Score of B.
The stock’s impressive value style score is based on several impressive parameters.
PE (Price to Earnings) Ratio
Masimo can be an interesting choice, thanks to its forward PE of 30.4.The stock’s PE compares favorably with the broader industry’s trailing twelve-month PE ratio, which stands at 32.6. This indicates that the stock is relatively undervalued compared to its peers right now.
Masimo’s P/FCF ratio stands at 14.5, which shows a discount when compared with 27.6 of the broader industry. One of the reasons why the P/CF ratio is preferred over the P/E ratio is because the net income of the cash flow portion rightly adds depreciation and amortization back in since these are not cash expenditures.
Leverage Ratio
The Debt/Equity (D/E) ratio for Masimo is 0.0% as compared to the broader industry’s 58.3%. Notably, D/E is used to help gauge a company's financial health.
Amedisys carries a Zacks Rank #2 with a Value Score of B.
Lantheus carries a Zacks Rank #2 with a Value Score of A.
VWR carries a Zacks Rank #2 with a Value Score of A.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
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Here's Why Masimo (MASI) is a Suitable Value Pick for Now
The popularity of value investment is growing by leaps and bounds, primarily because it is one of the favorite investing mantras followed by successful investors. As per a recent Forbes article, shares of value investment guru Warren Buffett’s conglomerate Berkshire Hathaway increased 20% in 2016, boosting his personal fortune by $12.3 billion (more than any other billionaire in the United States) to $74.2 billion.
If investors are looking for safe and profitable stocks, value stocks are probably the right option. Value strategy helps us find stocks that offer tantalizing discounts when compared to fair value.
The screening of such stocks requires the assessment of several key metrics and financial ratios. These metrics help us distinguish stocks which are overvalued, rightly lowly valued, temporarily undervalued and the ones which are poised scaled higher. Our Value Style Scorewarns investors against ‘value traps’ and helps them to find stocks that are actually trading cheap.
Our latest style score system has made the task of choosing a suitable value stock much simpler.Our research shows that stocks with a Value Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential.
Fortunately for investors looking for this combination, we have identified a potential candidate which may prove to be an impressive value pick — Masimo Corporation (MASI - Free Report) . The stock has a favorable Zacks Rank #2 and a Value Score of B.
The stock’s impressive value style score is based on several impressive parameters.
PE (Price to Earnings) Ratio
Masimo can be an interesting choice, thanks to its forward PE of 30.4.The stock’s PE compares favorably with the broader industry’s trailing twelve-month PE ratio, which stands at 32.6. This indicates that the stock is relatively undervalued compared to its peers right now.
Masimo Corporation PE Ratio (TTM)
Masimo Corporation PE Ratio (TTM) | Masimo Corporation Quote
P/FCF (Price to Free Cash Flow) Ratio
Masimo’s P/FCF ratio stands at 14.5, which shows a discount when compared with 27.6 of the broader industry. One of the reasons why the P/CF ratio is preferred over the P/E ratio is because the net income of the cash flow portion rightly adds depreciation and amortization back in since these are not cash expenditures.
Leverage Ratio
The Debt/Equity (D/E) ratio for Masimo is 0.0% as compared to the broader industry’s 58.3%. Notably, D/E is used to help gauge a company's financial health.
Other Value Picks in the Same Space
Other value picks in the medical sector that are worth mentioning are Amedisys, Inc. (AMED - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and VWR Corporation . You can see the complete list of today’s Zacks #1 Rank stocks here.
Amedisys carries a Zacks Rank #2 with a Value Score of B.
Lantheus carries a Zacks Rank #2 with a Value Score of A.
VWR carries a Zacks Rank #2 with a Value Score of A.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Learn more >>