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Should Value Investors Buy Catalyst Pharmaceuticals (CPRX) Stock?

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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 stock to keep an eye on is Catalyst Pharmaceuticals (CPRX - Free Report) . CPRX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.

Investors will also notice that CPRX has a PEG ratio of 0.72. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CPRX's PEG compares to its industry's average PEG of 1.85. Within the past year, CPRX's PEG has been as high as 3.40 and as low as 0.63, with a median of 1.06.

Finally, investors will want to recognize that CPRX has a P/CF ratio of 10.23. 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. CPRX's current P/CF looks attractive when compared to its industry's average P/CF of 14.25. CPRX's P/CF has been as high as 25.41 and as low as 10.16, with a median of 13.48, all within the past year.

These are only a few of the key metrics included in Catalyst Pharmaceuticals's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CPRX looks like an impressive value stock at the moment.


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