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Are Investors Undervaluing Addus HomeCare (ADUS) Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is Addus HomeCare (ADUS - Free Report) . ADUS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We also note that ADUS holds a PEG ratio of 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ADUS's industry has an average PEG of 2.14 right now. Over the last 12 months, ADUS's PEG has been as high as 2.50 and as low as 1.43, with a median of 2.11.

We should also highlight that ADUS has a P/B ratio of 2.03. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ADUS's current P/B looks attractive when compared to its industry's average P/B of 2.64. Within the past 52 weeks, ADUS's P/B has been as high as 2.95 and as low as 2.01, with a median of 2.56.

Finally, we should also recognize that ADUS has a P/CF ratio of 19.88. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ADUS's P/CF compares to its industry's average P/CF of 23.14. Within the past 12 months, ADUS's P/CF has been as high as 30.54 and as low as 19.67, with a median of 26.68.

Investors could also keep in mind DaVita (DVA - Free Report) , an Medical - Outpatient and Home Healthcare stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

DaVita is currently trading with a Forward P/E ratio of 11.73 while its PEG ratio sits at 0.93. Both of the company's metrics compare favorably to its industry's average P/E of 17.71 and average PEG ratio of 2.14.

Over the last 12 months, DVA's P/E has been as high as 15.73, as low as 7.30, with a median of 12.91, and its PEG ratio has been as high as 1.87, as low as 0.87, with a median of 1.16.

Furthermore, DaVita holds a P/B ratio of 6.78 and its industry's price-to-book ratio is 2.64. DVA's P/B has been as high as 12.74, as low as 6.78, with a median of 8.25 over the past 12 months.

These are just a handful of the figures considered in Addus HomeCare and DaVita'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 ADUS and DVA is an impressive value stock right now.


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