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Are Investors Undervaluing AmerisourceBergen (ABC) Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice 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 a P/E ratio of 11.44, which compares to its industry's average of 16.11. ABC's Forward P/E has been as high as 14.32 and as low as 10.10, with a median of 11.73, all within the past year.

Investors will also notice that ABC has a PEG ratio of 1.45. 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. ABC's PEG compares to its industry's average PEG of 1.66. 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 1.37.

Finally, investors will want to recognize that ABC has a P/CF ratio of 11.93. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.35. Within the past 12 months, 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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