Is AmerisourceBergen (ABC) 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.
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 stock to keep an eye on is AmerisourceBergen (ABC). ABC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 15.41 right now. For comparison, its industry sports an average P/E of 19.01. ABC's Forward P/E has been as high as 15.57 and as low as 11.77, with a median of 13.60, all within the past year.
Finally, investors should note that ABC has a P/CF ratio of 15.83. 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 stock's P/CF looks attractive against its industry's average P/CF of 23.22. ABC's P/CF has been as high as 15.99 and as low as 10.91, with a median of 13.27, all within the past year.
McKesson (MCK) may be another strong Medical - Dental Supplies stock to add to your shortlist. MCK is a # 2 (Buy) stock with a Value grade of A.
Shares of McKesson are currently trading at a forward earnings multiple of 14.85 and a PEG ratio of 1.37 compared to its industry's P/E and PEG ratios of 19.01 and 1.50, respectively.
MCK's price-to-earnings ratio has been as high as 15.66 and as low as 12.75, with a median of 14.31, while its PEG ratio has been as high as 1.56 and as low as 1.23, with a median of 1.40, all within the past year.
Furthermore, McKesson holds a P/B ratio of -37.26 and its industry's price-to-book ratio is 7.14. MCK's P/B has been as high as -21.98, as low as -45.14, with a median of -35.31 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AmerisourceBergen and McKesson are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABC and MCK feels like a great value stock at the moment.
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AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
McKesson Corporation (MCK) : Free Stock Analysis Report
