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Is Bausch Health (BHC) a Great Value Stock Right Now?

Zacks Equity Research
RPC (RES) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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 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.

One stock to keep an eye on is Bausch Health (BHC). BHC 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 5.75 right now. For comparison, its industry sports an average P/E of 6.82. Over the past year, BHC's Forward P/E has been as high as 7.96 and as low as 4.59, with a median of 6.22.

We also note that BHC holds a PEG ratio of 0.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BHC's industry currently sports an average PEG of 1.03. Over the last 12 months, BHC's PEG has been as high as 0.62 and as low as 0.23, with a median of 0.33.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BHC has a P/S ratio of 1. This compares to its industry's average P/S of 2.74.

These are just a handful of the figures considered in Bausch Health'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 BHC is an impressive value stock right now.


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