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Should Value Investors Buy Phibro Animal Health (PAHC) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

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 stock to keep an eye on is Phibro Animal Health (PAHC - Free Report) . PAHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.13, while its industry has an average P/E of 22.50. Over the past 52 weeks, PAHC's Forward P/E has been as high as 14.03 and as low as 9.13, with a median of 10.88.

Finally, investors will want to recognize that PAHC has a P/CF ratio of 8.83. 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. This stock's P/CF looks attractive against its industry's average P/CF of 32.39. Over the past year, PAHC's P/CF has been as high as 10.20 and as low as 6.07, with a median of 8.66.

If you're looking for another solid Medical - Products value stock, take a look at Perrigo (PRGO - Free Report) . PRGO is a # 2 (Buy) stock with a Value score of A.

Perrigo sports a P/B ratio of 0.94 as well; this compares to its industry's price-to-book ratio of 6.68. In the past 52 weeks, PRGO's P/B has been as high as 1.21, as low as 0.88, with a median of 1.02.

Value investors will likely look at more than just these metrics, but the above data helps show that Phibro Animal Health and Perrigo are likely undervalued currently. And when considering the strength of its earnings outlook, PAHC and PRGO sticks out as one of the market's strongest value stocks.


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