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Should Value Investors Buy Encompass Health (EHC) Stock?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Encompass Health (EHC - Free Report) . EHC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 18.73, while its industry has an average P/E of 19.41. Over the past year, EHC's Forward P/E has been as high as 19.31 and as low as 15.15, with a median of 16.83.
Another notable valuation metric for EHC is its P/B ratio of 4.12. The P/B ratio pits a stock's market value against 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 6.39. Over the past year, EHC's P/B has been as high as 4.35 and as low as 3.53, with a median of 3.92.
Finally, investors will want to recognize that EHC has a P/CF ratio of 12.93. 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. EHC's P/CF compares to its industry's average P/CF of 32.31. Over the past 52 weeks, EHC's P/CF has been as high as 13.79 and as low as 11.04, with a median of 12.11.
These are only a few of the key metrics included in Encompass Health'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, EHC looks like an impressive value stock at the moment.
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Should Value Investors Buy Encompass Health (EHC) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Encompass Health (EHC - Free Report) . EHC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 18.73, while its industry has an average P/E of 19.41. Over the past year, EHC's Forward P/E has been as high as 19.31 and as low as 15.15, with a median of 16.83.
Another notable valuation metric for EHC is its P/B ratio of 4.12. The P/B ratio pits a stock's market value against 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 6.39. Over the past year, EHC's P/B has been as high as 4.35 and as low as 3.53, with a median of 3.92.
Finally, investors will want to recognize that EHC has a P/CF ratio of 12.93. 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. EHC's P/CF compares to its industry's average P/CF of 32.31. Over the past 52 weeks, EHC's P/CF has been as high as 13.79 and as low as 11.04, with a median of 12.11.
These are only a few of the key metrics included in Encompass Health'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, EHC looks like an impressive value stock at the moment.