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Are Investors Undervaluing Laboratory Corp. of America (LH) Right Now?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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 stock to keep an eye on is Laboratory Corp. of America (LH - Free Report) . LH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.12, which compares to its industry's average of 18.37. Over the last 12 months, LH's Forward P/E has been as high as 15.38 and as low as 10.99, with a median of 13.17.
Investors will also notice that LH has a PEG ratio of 1.34. 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 1.71. Within the past year, LH's PEG has been as high as 1.46 and as low as 1.34, with a median of 1.40.
Another notable valuation metric for LH is its P/B ratio of 2.20. 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. LH's current P/B looks attractive when compared to its industry's average P/B of 6.36. Over the past 12 months, LH's P/B has been as high as 2.63 and as low as 1.84, with a median of 2.16.
Finally, investors should note that LH has a P/CF ratio of 9.40. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 24.15. Over the past year, LH's P/CF has been as high as 9.65 and as low as 7.12, with a median of 8.41.
Investors could also keep in mind McKesson (MCK - Free Report) , an Medical - Dental Supplies stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of McKesson currently holds a Forward P/E ratio of 14.51, and its PEG ratio is 1.44. In comparison, its industry sports average P/E and PEG ratios of 18.37 and 1.71.
Over the last 12 months, MCK's P/E has been as high as 15.66, as low as 11.49, with a median of 14.01, and its PEG ratio has been as high as 1.56, as low as 0.99, with a median of 1.43.
Furthermore, McKesson holds a P/B ratio of -42.99 and its industry's price-to-book ratio is 6.36. MCK's P/B has been as high as -24.38, as low as -59.10, with a median of -38.58 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Laboratory Corp. of America and McKesson are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LH and MCK feels like a great value stock at the moment.
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Are Investors Undervaluing Laboratory Corp. of America (LH) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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 stock to keep an eye on is Laboratory Corp. of America (LH - Free Report) . LH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.12, which compares to its industry's average of 18.37. Over the last 12 months, LH's Forward P/E has been as high as 15.38 and as low as 10.99, with a median of 13.17.
Investors will also notice that LH has a PEG ratio of 1.34. 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 1.71. Within the past year, LH's PEG has been as high as 1.46 and as low as 1.34, with a median of 1.40.
Another notable valuation metric for LH is its P/B ratio of 2.20. 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. LH's current P/B looks attractive when compared to its industry's average P/B of 6.36. Over the past 12 months, LH's P/B has been as high as 2.63 and as low as 1.84, with a median of 2.16.
Finally, investors should note that LH has a P/CF ratio of 9.40. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 24.15. Over the past year, LH's P/CF has been as high as 9.65 and as low as 7.12, with a median of 8.41.
Investors could also keep in mind McKesson (MCK - Free Report) , an Medical - Dental Supplies stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of McKesson currently holds a Forward P/E ratio of 14.51, and its PEG ratio is 1.44. In comparison, its industry sports average P/E and PEG ratios of 18.37 and 1.71.
Over the last 12 months, MCK's P/E has been as high as 15.66, as low as 11.49, with a median of 14.01, and its PEG ratio has been as high as 1.56, as low as 0.99, with a median of 1.43.
Furthermore, McKesson holds a P/B ratio of -42.99 and its industry's price-to-book ratio is 6.36. MCK's P/B has been as high as -24.38, as low as -59.10, with a median of -38.58 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Laboratory Corp. of America and McKesson are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LH and MCK feels like a great value stock at the moment.