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Is AmerisourceBergen (ABC) a Great Value Stock Right Now?

Zacks Equity Research

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is AmerisourceBergen (ABC). ABC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.53, while its industry has an average P/E of 16.15. Over the last 12 months, ABC's Forward P/E has been as high as 14.32 and as low as 10.10, with a median of 11.84.

Investors should also note that ABC holds a PEG ratio of 1.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ABC's industry has an average PEG of 1.66 right now. Over the past 52 weeks, ABC's PEG has been as high as 1.66 and as low as 1.10, with a median of 1.34.

Finally, investors should note that ABC has a P/CF ratio of 11.93. 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 13.28. Over the past year, ABC's P/CF has been as high as 12.92 and as low as 6.91, with a median of 10.29.

These are just a handful of the figures considered in AmerisourceBergen'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 ABC is an impressive value stock right now.


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