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Are Investors Undervaluing Bayer (BAYRY) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

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.

Bayer (BAYRY - Free Report) is a stock many investors are watching right now. BAYRY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.50. This compares to its industry's average Forward P/E of 14.98. BAYRY's Forward P/E has been as high as 13.85 and as low as 7.22, with a median of 9.70, all within the past year.

Investors will also notice that BAYRY has a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BAYRY's PEG compares to its industry's average PEG of 1.81. Over the past 52 weeks, BAYRY's PEG has been as high as 1.96 and as low as 0.69, with a median of 1.09.

Finally, investors should note that BAYRY has a P/CF ratio of 7.18. 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. BAYRY's P/CF compares to its industry's average P/CF of 15.77. Over the past year, BAYRY's P/CF has been as high as 13.49 and as low as 6.11, with a median of 7.60.

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


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