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Is Takeda Pharmaceutical Co. (TAK) a Great Value Stock Right Now?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Another notable valuation metric for TAK is its P/B ratio of 0.94. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. TAK's current P/B looks attractive when compared to its industry's average P/B of 1.45. TAK's P/B has been as high as 1.04 and as low as 0.79, with a median of 0.91, over 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TAK has a P/S ratio of 1.71. This compares to its industry's average P/S of 3.39.

Finally, investors will want to recognize that TAK has a P/CF ratio of 7.75. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.92. Over the past 52 weeks, TAK's P/CF has been as high as 7.95 and as low as 6.35, with a median of 7.01.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Takeda Pharmaceutical Co. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TAK feels like a great value stock at the moment.


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