U.S. Markets closed

Is Amgen (AMGN) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Amgen (AMGN) is a stock many investors are watching right now. AMGN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also note that AMGN holds a PEG ratio of 2.19. 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. AMGN's PEG compares to its industry's average PEG of 4.10. Within the past year, AMGN's PEG has been as high as 2.35 and as low as 1.76, with a median of 2.05.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AMGN has a P/S ratio of 4.77. This compares to its industry's average P/S of 12.95.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Amgen is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMGN feels like a great value stock at the moment.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Amgen Inc. (AMGN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.