The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.
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.
Omnicell (OMCL) is a stock many investors are watching right now. OMCL is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors will also notice that OMCL has a PEG ratio of 3.17. 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. OMCL's PEG compares to its industry's average PEG of 8.07. Over the past 52 weeks, OMCL's PEG has been as high as 24.94 and as low as 2.78, with a median of 4.69.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OMCL has a P/S ratio of 1.25. This compares to its industry's average P/S of 2.22.
Value investors will likely look at more than just these metrics, but the above data helps show that Omnicell is likely undervalued currently. And when considering the strength of its earnings outlook, OMCL sticks out as one of the market's strongest value stocks.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
