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Are Investors Undervaluing Baxter International (BAX) Right Now?
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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Baxter International (BAX - Free Report) . BAX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.96, which compares to its industry's average of 15.71. BAX's Forward P/E has been as high as 15.24 and as low as 8.33, with a median of 11.86, all within the past year.
BAX is also sporting 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. BAX's industry currently sports an average PEG of 1.88. Over the past 52 weeks, BAX's PEG has been as high as 12.00 and as low as 0.61, with a median of 0.92.
Another valuation metric that we should highlight is BAX's P/B ratio of 1.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.30. BAX's P/B has been as high as 2.66 and as low as 1.53, with a median of 2.20, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAX has a P/S ratio of 1.09. This compares to its industry's average P/S of 1.56.
Investors could also keep in mind Zimmer Biomet (ZBH - Free Report) , another Medical - Products stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Zimmer Biomet is currently trading with a Forward P/E ratio of 11.98 while its PEG ratio sits at 2.25. Both of the company's metrics compare favorably to its industry's average P/E of 15.71 and average PEG ratio of 1.88.
Over the past year, ZBH's P/E has been as high as 13.52, as low as 10.73, with a median of 12.36; its PEG ratio has been as high as 2.36, as low as 1.66, with a median of 1.93 during the same time period.
Additionally, Zimmer Biomet has a P/B ratio of 1.58 while its industry's price-to-book ratio sits at 2.30. For ZBH, this valuation metric has been as high as 1.82, as low as 1.43, with a median of 1.66 over the past year.
These are just a handful of the figures considered in Baxter International and Zimmer Biomet's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BAX and ZBH is an impressive value stock right now.
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Are Investors Undervaluing Baxter International (BAX) Right Now?
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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Baxter International (BAX - Free Report) . BAX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.96, which compares to its industry's average of 15.71. BAX's Forward P/E has been as high as 15.24 and as low as 8.33, with a median of 11.86, all within the past year.
BAX is also sporting 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. BAX's industry currently sports an average PEG of 1.88. Over the past 52 weeks, BAX's PEG has been as high as 12.00 and as low as 0.61, with a median of 0.92.
Another valuation metric that we should highlight is BAX's P/B ratio of 1.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.30. BAX's P/B has been as high as 2.66 and as low as 1.53, with a median of 2.20, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAX has a P/S ratio of 1.09. This compares to its industry's average P/S of 1.56.
Investors could also keep in mind Zimmer Biomet (ZBH - Free Report) , another Medical - Products stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Zimmer Biomet is currently trading with a Forward P/E ratio of 11.98 while its PEG ratio sits at 2.25. Both of the company's metrics compare favorably to its industry's average P/E of 15.71 and average PEG ratio of 1.88.
Over the past year, ZBH's P/E has been as high as 13.52, as low as 10.73, with a median of 12.36; its PEG ratio has been as high as 2.36, as low as 1.66, with a median of 1.93 during the same time period.
Additionally, Zimmer Biomet has a P/B ratio of 1.58 while its industry's price-to-book ratio sits at 2.30. For ZBH, this valuation metric has been as high as 1.82, as low as 1.43, with a median of 1.66 over the past year.
These are just a handful of the figures considered in Baxter International and Zimmer Biomet's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BAX and ZBH is an impressive value stock right now.