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Should Value Investors Buy Puma Biotechnology (PBYI) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company to watch right now is Puma Biotechnology (PBYI - Free Report) . PBYI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors should also recognize that PBYI has a P/B ratio of 2.17. 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. PBYI's current P/B looks attractive when compared to its industry's average P/B of 3.63. PBYI's P/B has been as high as 6.59 and as low as 1.67, with a median of 3.87, over the past year.
Finally, we should also recognize that PBYI has a P/CF ratio of 4.44. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 17.55. PBYI's P/CF has been as high as 14.75 and as low as 3.42, with a median of 7.24, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Puma Biotechnology is likely undervalued currently. And when considering the strength of its earnings outlook, PBYI sticks out at as one of the market's strongest value stocks.