Back to top

Image: Bigstock

Should Value Investors Buy Jazz Pharmaceuticals (JAZZ) Stock?

Read MoreHide Full Article

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, 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 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.

Jazz Pharmaceuticals (JAZZ - Free Report) is a stock many investors are watching right now. JAZZ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. JAZZ has a P/S ratio of 3.78. This compares to its industry's average P/S of 7.2.

Finally, investors will want to recognize that JAZZ has a P/CF ratio of 10.75. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. JAZZ's P/CF compares to its industry's average P/CF of 11.39. JAZZ's P/CF has been as high as 16.59 and as low as 8.10, with a median of 11.40, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Jazz Pharmaceuticals is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JAZZ feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Jazz Pharmaceuticals PLC (JAZZ) - free report >>

Published in