Back to top

Image: Bigstock

Are Investors Undervaluing Smith & Nephew SNATS (SNN) Right Now?

Read MoreHide Full Article

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.

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.

Smith & Nephew SNATS (SNN - Free Report) is a stock many investors are watching right now. SNN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.83. This compares to its industry's average Forward P/E of 21.34. SNN's Forward P/E has been as high as 19.03 and as low as 11.69, with a median of 15.01, all within the past year.

SNN is also sporting a PEG ratio of 1.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SNN's PEG compares to its industry's average PEG of 2.48. Over the past 52 weeks, SNN's PEG has been as high as 3.09 and as low as 1.10, with a median of 1.42.

Investors should also recognize that SNN has a P/B ratio of 2.34. 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 company's current P/B looks solid when compared to its industry's average P/B of 6.93. Within the past 52 weeks, SNN's P/B has been as high as 2.72 and as low as 1.80, with a median of 2.33.

These are only a few of the key metrics included in Smith & Nephew SNATS's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SNN looks like an impressive value stock at the moment.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Smith & Nephew SNATS, Inc. (SNN) - free report >>

Published in