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Should Value Investors Buy Takeda Pharmaceutical Co. (TAK) Stock?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 stock to keep an eye on is Takeda Pharmaceutical Co. (TAK - Free Report) . TAK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TAK has a P/S ratio of 1.72. This compares to its industry's average P/S of 3.93.

Finally, we should also recognize that TAK has a P/CF ratio of 8.12. 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. TAK's current P/CF looks attractive when compared to its industry's average P/CF of 10.04. TAK's P/CF has been as high as 8.14 and as low as 4.74, with a median of 7.02, all within the past year.

These are just a handful of the figures considered in Takeda Pharmaceutical Co.'s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that TAK is an impressive value stock right now.


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