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Is Mallinckrodt (MNK) Stock Undervalued Right Now?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Mallinckrodt (MNK - Free Report) . MNK is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 2.88, which compares to its industry's average of 8.57. Over the last 12 months, MNK's Forward P/E has been as high as 5.01 and as low as 1.87, with a median of 2.93.

Another valuation metric that we should highlight is MNK's P/B ratio of 0.67. 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. This stock's P/B looks solid versus its industry's average P/B of 1.12. Within the past 52 weeks, MNK's P/B has been as high as 0.72 and as low as 0.16, with a median of 0.34.

These are only a few of the key metrics included in Mallinckrodt's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MNK looks like an impressive value stock at the moment.

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