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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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is McKesson (MCK - Free Report) . MCK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.06, which compares to its industry's average of 19.01. MCK's Forward P/E has been as high as 10.87 and as low as 7.68, with a median of 9.36, all within the past year.
Investors should also note that MCK holds a PEG ratio of 1.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MCK's industry has an average PEG of 1.97 right now. Over the last 12 months, MCK's PEG has been as high as 1.54 and as low as 1.09, with a median of 1.34.
Investors should also recognize that MCK has a P/B ratio of 3.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.43. Over the past 12 months, MCK's P/B has been as high as 4.74 and as low as 2.36, with a median of 3.35.
Finally, we should also recognize that MCK has a P/CF ratio of 14.99. 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. MCK's P/CF compares to its industry's average P/CF of 37.65. MCK's P/CF has been as high as 20.11 and as low as 7.02, with a median of 9.18, all within the past year.
These are only a few of the key metrics included in McKesson'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, MCK looks like an impressive value stock at the moment.
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Is McKesson (MCK) a Great Value Stock Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is McKesson (MCK - Free Report) . MCK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.06, which compares to its industry's average of 19.01. MCK's Forward P/E has been as high as 10.87 and as low as 7.68, with a median of 9.36, all within the past year.
Investors should also note that MCK holds a PEG ratio of 1.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MCK's industry has an average PEG of 1.97 right now. Over the last 12 months, MCK's PEG has been as high as 1.54 and as low as 1.09, with a median of 1.34.
Investors should also recognize that MCK has a P/B ratio of 3.53. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.43. Over the past 12 months, MCK's P/B has been as high as 4.74 and as low as 2.36, with a median of 3.35.
Finally, we should also recognize that MCK has a P/CF ratio of 14.99. 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. MCK's P/CF compares to its industry's average P/CF of 37.65. MCK's P/CF has been as high as 20.11 and as low as 7.02, with a median of 9.18, all within the past year.
These are only a few of the key metrics included in McKesson'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, MCK looks like an impressive value stock at the moment.