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Should Value Investors Buy Bayer (BAYRY) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 Bayer (BAYRY - Free Report) . BAYRY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.46 right now. For comparison, its industry sports an average P/E of 15.26. Over the last 12 months, BAYRY's Forward P/E has been as high as 15.01 and as low as 8.56, with a median of 10.86.

BAYRY is also sporting a PEG ratio of 0.91. 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. BAYRY's industry currently sports an average PEG of 1.83. Over the last 12 months, BAYRY's PEG has been as high as 2.92 and as low as 0.91, with a median of 1.32.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BAYRY has a P/S ratio of 1.53. This compares to its industry's average P/S of 4.01.

Finally, we should also recognize that BAYRY has a P/CF ratio of 13.50. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BAYRY's P/CF compares to its industry's average P/CF of 15.85. Over the past year, BAYRY's P/CF has been as high as 14.69 and as low as 6.20, with a median of 8.81.

These are just a handful of the figures considered in Bayer'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 BAYRY is an impressive value stock right now.


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