Should Value Investors Buy Perrigo (PRGO) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Perrigo (PRGO). PRGO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.59, while its industry has an average P/E of 22.48. Over the last 12 months, PRGO's Forward P/E has been as high as 16.89 and as low as 11.09, with a median of 13.14.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PRGO has a P/S ratio of 0.99. This compares to its industry's average P/S of 1.83.
Finally, investors should note that PRGO has a P/CF ratio of 20.50. 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. PRGO's P/CF compares to its industry's average P/CF of 32.74. Over the past year, PRGO's P/CF has been as high as 32.80 and as low as 19.66, with a median of 24.28.
If you're looking for another solid Medical - Products value stock, take a look at VAREX IMAGING (VREX). VREX is a # 2 (Buy) stock with a Value score of A.
VAREX IMAGING is trading at a forward earnings multiple of 17.39 at the moment, with a PEG ratio of 0.58. This compares to its industry's average P/E of 22.48 and average PEG ratio of 2.76.
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Perrigo Company plc (PRGO) : Free Stock Analysis Report
VAREX IMAGING (VREX) : Free Stock Analysis Report
