While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Envision Healthcare is a stock many investors are watching right now. EVHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.78. This compares to its industry's average Forward P/E of 18.17. Over the last 12 months, EVHC's Forward P/E has been as high as 12.99 and as low as 6.65, with a median of 11.27.
EVHC is also sporting a PEG ratio of 1.02. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EVHC's PEG compares to its industry's average PEG of 1.43. Over the last 12 months, EVHC's PEG has been as high as 1.08 and as low as 0.44, with a median of 0.88.
Investors should also recognize that EVHC has a P/B ratio of 1.05. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. EVHC's current P/B looks attractive when compared to its industry's average P/B of 2.55. Over the past 12 months, EVHC's P/B has been as high as 1.05 and as low as 0.42, with a median of 0.70.
Value investors will likely look at more than just these metrics, but the above data helps show that Envision Healthcare is likely undervalued currently. And when considering the strength of its earnings outlook, EVHC sticks out at as one of the market's strongest value stocks.