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Is Mylan (VTRS) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company value investors might notice is Mylan (VTRS - Free Report) . VTRS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 4.02 right now. For comparison, its industry sports an average P/E of 7.65. Over the past year, VTRS's Forward P/E has been as high as 5.05 and as low as 2.95, with a median of 3.67.

We should also highlight that VTRS has a P/B ratio of 0.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. VTRS's current P/B looks attractive when compared to its industry's average P/B of 1.13. VTRS's P/B has been as high as 0.99 and as low as 0.58, with a median of 0.73, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. VTRS has a P/S ratio of 0.82. This compares to its industry's average P/S of 2.15.

Finally, we should also recognize that VTRS has a P/CF ratio of 4.25. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.43. Over the past year, VTRS's P/CF has been as high as 5.80 and as low as 3.36, with a median of 4.07.

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


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