Are Investors Undervaluing Universal Health Services (UHS) Right Now?

UHS

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.86. This compares to its industry's average Forward P/E of 15.66. Over the past 52 weeks, UHS's Forward P/E has been as high as 15.12 and as low as 10.83, with a median of 12.51.

Investors will also notice that UHS has a PEG ratio of 0.96. 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 1.66. Within the past year, UHS's PEG has been as high as 3.76 and as low as 0.93, with a median of 1.37.

These are only a few of the key metrics included in Universal Health Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UHS looks like an impressive value stock at the moment.

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