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.
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.
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.
Mallinckrodt (MNK - Free Report) is a stock many investors are watching right now. MNK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 3.62 right now. For comparison, its industry sports an average P/E of 9.30. Over the past year, MNK's Forward P/E has been as high as 5.01 and as low as 1.87, with a median of 3.08.
Investors will also notice that MNK has a PEG ratio of 0.35. 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. MNK's PEG compares to its industry's average PEG of 1.04. Over the last 12 months, MNK's PEG has been as high as 0.56 and as low as 0.25, with a median of 0.35.
These are just a handful of the figures considered in Mallinckrodt'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 MNK is an impressive value stock right now.