Are Investors Undervaluing Bayer (BAYRY) Right Now?
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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Bayer (BAYRY). BAYRY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.59 right now. For comparison, its industry sports an average P/E of 14.89. Over the past year, BAYRY's Forward P/E has been as high as 15.01 and as low as 7.94, with a median of 10.32.
Investors should also note that BAYRY holds a PEG ratio of 0.83. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BAYRY's industry currently sports an average PEG of 1.84. Over the last 12 months, BAYRY's PEG has been as high as 2.92 and as low as 0.77, with a median of 1.27.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BAYRY has a P/S ratio of 1.38. This compares to its industry's average P/S of 3.65.
Finally, investors will want to recognize that BAYRY has a P/CF ratio of 12.41. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BAYRY's P/CF compares to its industry's average P/CF of 15.50. BAYRY's P/CF has been as high as 14.69 and as low as 6.20, with a median of 8.92, all within the past year.
These are just a handful of the figures considered in Bayer's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BAYRY is an impressive value stock right now.
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