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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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
LabCorp (LH - Free Report) is a stock many investors are watching right now. LH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11, which compares to its industry's average of 17.29. Over the past year, LH's Forward P/E has been as high as 18.15 and as low as 8.57, with a median of 14.09.
Investors should also note that LH holds a PEG ratio of 1.08. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LH's PEG compares to its industry's average PEG of 2.42. Over the last 12 months, LH's PEG has been as high as 3.50 and as low as 1.04, with a median of 1.68.
Another valuation metric that we should highlight is LH's P/B ratio of 2.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.40. Over the past 12 months, LH's P/B has been as high as 2.67 and as low as 1.34, with a median of 2.33.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LH has a P/S ratio of 1.6. This compares to its industry's average P/S of 3.39.
Finally, investors will want to recognize that LH has a P/CF ratio of 12.25. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 35.19. Over the past year, LH's P/CF has been as high as 18.71 and as low as 6.41, with a median of 12.65.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LabCorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LH feels like a great value stock at the moment.
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Should Value Investors Buy LabCorp (LH) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
LabCorp (LH - Free Report) is a stock many investors are watching right now. LH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11, which compares to its industry's average of 17.29. Over the past year, LH's Forward P/E has been as high as 18.15 and as low as 8.57, with a median of 14.09.
Investors should also note that LH holds a PEG ratio of 1.08. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LH's PEG compares to its industry's average PEG of 2.42. Over the last 12 months, LH's PEG has been as high as 3.50 and as low as 1.04, with a median of 1.68.
Another valuation metric that we should highlight is LH's P/B ratio of 2.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.40. Over the past 12 months, LH's P/B has been as high as 2.67 and as low as 1.34, with a median of 2.33.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LH has a P/S ratio of 1.6. This compares to its industry's average P/S of 3.39.
Finally, investors will want to recognize that LH has a P/CF ratio of 12.25. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 35.19. Over the past year, LH's P/CF has been as high as 18.71 and as low as 6.41, with a median of 12.65.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LabCorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LH feels like a great value stock at the moment.