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Are Investors Undervaluing Kamada (KMDA) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 to watch right now is Kamada (KMDA - Free Report) . KMDA is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 20.28, which compares to its industry's average of 35.87. Over the past 52 weeks, KMDA's Forward P/E has been as high as 26.70 and as low as 17.41, with a median of 20.60.

We should also highlight that KMDA has a P/B ratio of 1.71. 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. This stock's P/B looks solid versus its industry's average P/B of 3.19. Over the past year, KMDA's P/B has been as high as 1.85 and as low as 1.16, with a median of 1.50.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KMDA has a P/S ratio of 2.5. This compares to its industry's average P/S of 5.36.

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


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