Back to top

Image: Bigstock

Is Henry Schein (HSIC) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Henry Schein (HSIC - Free Report) . HSIC is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.27, while its industry has an average P/E of 18.65. Over the past 52 weeks, HSIC's Forward P/E has been as high as 15.82 and as low as 12.57, with a median of 13.90.

Investors should also note that HSIC holds a PEG ratio of 2.11. 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. HSIC's PEG compares to its industry's average PEG of 2.36. Within the past year, HSIC's PEG has been as high as 2.31 and as low as 1.77, with a median of 2.08.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HSIC has a P/S ratio of 0.71. This compares to its industry's average P/S of 1.86.

Finally, our model also underscores that HSIC has a P/CF ratio of 11.89. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 20.98. Over the past 52 weeks, HSIC's P/CF has been as high as 15.66 and as low as 10.92, with a median of 12.77.

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

Published in