We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is DaVita (DVA - Free Report) . DVA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 14.16 right now. For comparison, its industry sports an average P/E of 21.48. Over the past 52 weeks, DVA's Forward P/E has been as high as 15.73 and as low as 9.57, with a median of 13.57.
We also note that DVA holds a PEG ratio of 1.17. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DVA's PEG compares to its industry's average PEG of 1.87. DVA's PEG has been as high as 1.87 and as low as 0.56, with a median of 0.98, all within the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DVA has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.32.
Investors could also keep in mind Encompass Health (EHC - Free Report) , an Medical - Outpatient and Home Healthcare stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Encompass Health are currently trading at a forward earnings multiple of 20.17 and a PEG ratio of 1.48 compared to its industry's P/E and PEG ratios of 21.48 and 1.87, respectively.
Over the past year, EHC's P/E has been as high as 20.79, as low as 16.27, with a median of 18.81; its PEG ratio has been as high as 1.77, as low as 1.20, with a median of 0.98 during the same time period.
Furthermore, Encompass Health holds a P/B ratio of 3.65 and its industry's price-to-book ratio is 3.78. EHC's P/B has been as high as 3.70, as low as 2.83, with a median of 3.27 over the past 12 months.
These are only a few of the key metrics included in DaVita and Encompass Health strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, DVA and EHC look 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:
Image: Bigstock
Should Value Investors Buy DaVita (DVA) Stock?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is DaVita (DVA - Free Report) . DVA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 14.16 right now. For comparison, its industry sports an average P/E of 21.48. Over the past 52 weeks, DVA's Forward P/E has been as high as 15.73 and as low as 9.57, with a median of 13.57.
We also note that DVA holds a PEG ratio of 1.17. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DVA's PEG compares to its industry's average PEG of 1.87. DVA's PEG has been as high as 1.87 and as low as 0.56, with a median of 0.98, all within the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DVA has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.32.
Investors could also keep in mind Encompass Health (EHC - Free Report) , an Medical - Outpatient and Home Healthcare stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Encompass Health are currently trading at a forward earnings multiple of 20.17 and a PEG ratio of 1.48 compared to its industry's P/E and PEG ratios of 21.48 and 1.87, respectively.
Over the past year, EHC's P/E has been as high as 20.79, as low as 16.27, with a median of 18.81; its PEG ratio has been as high as 1.77, as low as 1.20, with a median of 0.98 during the same time period.
Furthermore, Encompass Health holds a P/B ratio of 3.65 and its industry's price-to-book ratio is 3.78. EHC's P/B has been as high as 3.70, as low as 2.83, with a median of 3.27 over the past 12 months.
These are only a few of the key metrics included in DaVita and Encompass Health strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, DVA and EHC look like an impressive value stock at the moment.