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Are Investors Undervaluing CRH Medical (CRHM) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

CRH Medical (CRHM - Free Report) is a stock many investors are watching right now. CRHM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.44, while its industry has an average P/E of 33.90. CRHM's Forward P/E has been as high as 112.36 and as low as 10.75, with a median of 36.87, all within the past year.

We should also highlight that CRHM has a P/B ratio of 1.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.10. Over the past year, CRHM's P/B has been as high as 2.03 and as low as 1.37, with a median of 1.64.

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. CRHM has a P/S ratio of 1.82. This compares to its industry's average P/S of 3.5.

Finally, investors will want to recognize that CRHM has a P/CF ratio of 5.71. 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. CRHM's P/CF compares to its industry's average P/CF of 21.36. Over the past 52 weeks, CRHM's P/CF has been as high as 6.96 and as low as 5.08, with a median of 5.72.

These are only a few of the key metrics included in CRH Medical'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, CRHM looks like an impressive value stock at the moment.


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