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Should Value Investors Buy Jazz Pharmaceuticals (JAZZ) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Jazz Pharmaceuticals (JAZZ - Free Report) . JAZZ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 3.61. This compares to its industry's average P/S of 5.74.

Finally, investors should note that JAZZ has a P/CF ratio of 7.84. 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. JAZZ's current P/CF looks attractive when compared to its industry's average P/CF of 16.69. Over the past 52 weeks, JAZZ's P/CF has been as high as 15.12 and as low as 7.75, with a median of 10.85.

These are only a few of the key metrics included in Jazz Pharmaceuticals'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, JAZZ looks like an impressive value stock at the moment.


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