Back to top

Image: Bigstock

Is AmerisourceBergen (ABC) a Great Value Stock Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company to watch right now is AmerisourceBergen (ABC - Free Report) . ABC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.49, while its industry has an average P/E of 17.94. Over the last 12 months, ABC's Forward P/E has been as high as 13.10 and as low as 9.32, with a median of 11.50.

Investors will also notice that ABC has a PEG ratio of 1.54. 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. ABC's industry has an average PEG of 2.51 right now. Over the past 52 weeks, ABC's PEG has been as high as 1.85 and as low as 1.26, with a median of 1.52.

Finally, our model also underscores that ABC has a P/CF ratio of 9.94. 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. ABC's current P/CF looks attractive when compared to its industry's average P/CF of 35.19. Over the past 52 weeks, ABC's P/CF has been as high as 17.96 and as low as 8.34, with a median of 10.75.

These are only a few of the key metrics included in AmerisourceBergen'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, ABC looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

AmerisourceBergen Corporation (ABC) - free report >>

Published in