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Are Investors Undervaluing Phibro Animal Health (PAHC) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

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 value investors might notice is Phibro Animal Health (PAHC - Free Report) . PAHC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 20.33, which compares to its industry's average of 27.57. PAHC's Forward P/E has been as high as 23.58 and as low as 12.87, with a median of 19.35, all within the past year.

Finally, we should also recognize that PAHC has a P/CF ratio of 14.57. 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. PAHC's current P/CF looks attractive when compared to its industry's average P/CF of 20.54. Within the past 12 months, PAHC's P/CF has been as high as 16.29 and as low as 9.91, with a median of 13.99.

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


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