Are Investors Undervaluing Biogen (BIIB) 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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Biogen (BIIB). BIIB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is BIIB's P/B ratio of 3.29. The P/B ratio pits a stock's market value against 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 3.32. Over the past year, BIIB's P/B has been as high as 5.85 and as low as 3.08, with a median of 4.67.
Finally, investors should note that BIIB has a P/CF ratio of 7.08. 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. BIIB's P/CF compares to its industry's average P/CF of 7.54. Over the past 52 weeks, BIIB's P/CF has been as high as 20.62 and as low as 7.04, with a median of 12.04.
These are just a handful of the figures considered in Biogen'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 BIIB is an impressive value stock right now.
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