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Are Investors Undervaluing Bausch Health (BHC) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Bausch Health (BHC - Free Report) . BHC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.39. This compares to its industry's average Forward P/E of 9.74. Over the last 12 months, BHC's Forward P/E has been as high as 8.78 and as low as 3.18, with a median of 6.16.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BHC has a P/S ratio of 1.13. This compares to its industry's average P/S of 2.91.

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




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