Back to top

Image: Bigstock

Should Value Investors Buy Catalyst Pharmaceuticals (CPRX) Stock?

Read MoreHide Full Article

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 company to watch right now is Catalyst Pharmaceuticals (CPRX - Free Report) . CPRX is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.

CPRX is also sporting a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CPRX's PEG compares to its industry's average PEG of 1.64. 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, we should also recognize that CPRX has a P/CF ratio of 10.23. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.81. Within the past 12 months, CPRX's P/CF has been as high as 25.41 and as low as 10.16, with a median of 13.48.

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

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in