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 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.
One company to watch right now is Change Healthcare . CHNG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is CHNG's P/B ratio of 1.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.74. Within the past 52 weeks, CHNG's P/B has been as high as 2.24 and as low as 1.83, with a median of 2.09.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHNG has a P/S ratio of 1.86. This compares to its industry's average P/S of 4.36.
Finally, investors should note that CHNG has a P/CF ratio of 10.72. 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. CHNG's P/CF compares to its industry's average P/CF of 17.51. Over the past 52 weeks, CHNG's P/CF has been as high as 14.84 and as low as 8.49, with a median of 11.31.
Investors could also keep in mind Computer Programs and Systems , an Medical Info Systems stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Computer Programs and Systems currently holds a Forward P/E ratio of 10.35, and its PEG ratio is 0.94. In comparison, its industry sports average P/E and PEG ratios of -150.75 and -8.38.
CPSI's price-to-earnings ratio has been as high as 13.21 and as low as 10.23, with a median of 11.99, while its PEG ratio has been as high as 1.65 and as low as 0.73, with a median of 0.86, all within the past year.
Computer Programs and Systems also has a P/B ratio of 1.90 compared to its industry's price-to-book ratio of 3.74. Over the past year, its P/B ratio has been as high as 2.55, as low as 1.86, with a median of 2.25.
These are only a few of the key metrics included in Change Healthcare and Computer Programs and Systems strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CHNG and CPSI look like an impressive value stock at the moment.
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Are Investors Undervaluing These Medical Stocks Right Now?
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 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.
One company to watch right now is Change Healthcare . CHNG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is CHNG's P/B ratio of 1.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.74. Within the past 52 weeks, CHNG's P/B has been as high as 2.24 and as low as 1.83, with a median of 2.09.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHNG has a P/S ratio of 1.86. This compares to its industry's average P/S of 4.36.
Finally, investors should note that CHNG has a P/CF ratio of 10.72. 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. CHNG's P/CF compares to its industry's average P/CF of 17.51. Over the past 52 weeks, CHNG's P/CF has been as high as 14.84 and as low as 8.49, with a median of 11.31.
Investors could also keep in mind Computer Programs and Systems , an Medical Info Systems stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Computer Programs and Systems currently holds a Forward P/E ratio of 10.35, and its PEG ratio is 0.94. In comparison, its industry sports average P/E and PEG ratios of -150.75 and -8.38.
CPSI's price-to-earnings ratio has been as high as 13.21 and as low as 10.23, with a median of 11.99, while its PEG ratio has been as high as 1.65 and as low as 0.73, with a median of 0.86, all within the past year.
Computer Programs and Systems also has a P/B ratio of 1.90 compared to its industry's price-to-book ratio of 3.74. Over the past year, its P/B ratio has been as high as 2.55, as low as 1.86, with a median of 2.25.
These are only a few of the key metrics included in Change Healthcare and Computer Programs and Systems strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CHNG and CPSI look like an impressive value stock at the moment.