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Should Value Investors Buy Teleflex (TFX) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Teleflex (TFX - Free Report) . TFX is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

Investors will also notice that TFX has a PEG ratio of 1.58. 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. TFX's industry has an average PEG of 2.17 right now. TFX's PEG has been as high as 2.09 and as low as 1.27, with a median of 1.78, 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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TFX has a P/S ratio of 1.68. This compares to its industry's average P/S of 2.38.

Finally, investors should note that TFX has a P/CF ratio of 7.41. 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. TFX's P/CF compares to its industry's average P/CF of 21.59. Within the past 12 months, TFX's P/CF has been as high as 22.89 and as low as 6.87, with a median of 13.86.

Value investors will likely look at more than just these metrics, but the above data helps show that Teleflex is likely undervalued currently. And when considering the strength of its earnings outlook, TFX sticks out as one of the market's strongest value stocks.


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