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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Eagle Pharmaceuticals (EGRX). EGRX 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 8.65, which compares to its industry's average of 20.59. Over the last 12 months, EGRX's Forward P/E has been as high as 21.50 and as low as 7.97, with a median of 14.23.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EGRX has a P/S ratio of 2.89. This compares to its industry's average P/S of 4.54.
Finally, investors will want to recognize that EGRX has a P/CF ratio of 18.71. 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 22.51. Within the past 12 months, EGRX's P/CF has been as high as 38.01 and as low as 14.52, with a median of 24.37.
These are just a handful of the figures considered in Eagle Pharmaceuticals'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 EGRX is an impressive value stock right now.