Should Value Investors Buy RadNet (RDNT) Stock?
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.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is RadNet (RDNT). RDNT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is RDNT's P/B ratio of 2.44. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.49. Over the past 12 months, RDNT's P/B has been as high as 3.95 and as low as 1.86, with a median of 2.49.
Finally, investors should note that RDNT has a P/CF ratio of 9.08. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. RDNT's P/CF compares to its industry's average P/CF of 21.83. Within the past 12 months, RDNT's P/CF has been as high as 11.62 and as low as 4.50, with a median of 8.82.
Value investors will likely look at more than just these metrics, but the above data helps show that RadNet is likely undervalued currently. And when considering the strength of its earnings outlook, RDNT sticks out at as one of the market's strongest value stocks.
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RadNet, Inc. (RDNT) : Free Stock Analysis Report
