Is Henry Schein (HSIC) Stock Undervalued Right Now?
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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is Henry Schein (HSIC). HSIC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.62, while its industry has an average P/E of 17.50. HSIC's Forward P/E has been as high as 18.52 and as low as 12.89, with a median of 15.62, all within the past year.
Investors should also recognize that HSIC has a P/B ratio of 2.62. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 6.38. Over the past year, HSIC's P/B has been as high as 3.03 and as low as 2.10, with a median of 2.57.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HSIC has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.07.
Finally, investors should note that HSIC has a P/CF ratio of 14.34. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. HSIC's current P/CF looks attractive when compared to its industry's average P/CF of 23.95. Within the past 12 months, HSIC's P/CF has been as high as 16.14 and as low as 10.52, with a median of 12.91.
Another great Medical - Dental Supplies stock you could consider is McKesson (MCK), which is a # 2 (Buy) stock with a Value Score of A.
McKesson is trading at a forward earnings multiple of 13.17 at the moment, with a PEG ratio of 1.27. This compares to its industry's average P/E of 17.50 and average PEG ratio of 1.46.
Over the past year, MCK's P/E has been as high as 15.66, as low as 12.67, with a median of 14.02; its PEG ratio has been as high as 1.56, as low as 1.12, with a median of 1.79 during the same time period.
Additionally, McKesson has a P/B ratio of -22.72 while its industry's price-to-book ratio sits at 6.38. For MCK, this valuation metric has been as high as -21.98, as low as -59.10, with a median of -31.88 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Henry Schein and McKesson are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HSIC and MCK feels like a great value stock at the moment.
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