Is Fresenius (FMS) 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.
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.
Fresenius (FMS) is a stock many investors are watching right now. FMS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 15.62, which compares to its industry's average of 39.67. Over the past year, FMS's Forward P/E has been as high as 18.14 and as low as 10.57, with a median of 14.14.
Investors will also notice that FMS has a PEG ratio of 2.04. 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. FMS's PEG compares to its industry's average PEG of 3.31. Over the past 52 weeks, FMS's PEG has been as high as 3.69 and as low as 1.97, with a median of 2.36.
Another valuation metric that we should highlight is FMS's P/B ratio of 1.76. The P/B ratio is used to compare a stock's market value with 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 4.08. Over the past year, FMS's P/B has been as high as 1.89 and as low as 1.18, with a median of 1.51.
Finally, we should also recognize that FMS has a P/CF ratio of 7.73. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 24.60. Over the past year, FMS's P/CF has been as high as 8.30 and as low as 5.59, with a median of 7.50.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Fresenius is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FMS feels like a great value stock at the moment.
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