Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Biogen (BIIB). BIIB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
BIIB is also sporting a PEG ratio of 1.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BIIB's industry has an average PEG of 5.38 right now. Over the last 12 months, BIIB's PEG has been as high as 2.19 and as low as 0.91, with a median of 1.19.
Another valuation metric that we should highlight is BIIB's P/B ratio of 3.29. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. BIIB's current P/B looks attractive when compared to its industry's average P/B of 3.59. Over the past year, BIIB's P/B has been as high as 3.49 and as low as 2.38, with a median of 2.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BIIB has a P/S ratio of 4.06. This compares to its industry's average P/S of 8.39.
Another great Medical - Biomedical and Genetics stock you could consider is Vir Biotechnology (VIR), which is a # 2 (Buy) stock with a Value Score of A.
Vir Biotechnology is currently trading with a Forward P/E ratio of -16.20 while its PEG ratio sits at -5.79. Both of the company's metrics compare favorably to its industry's average P/E of 95.27 and average PEG ratio of 5.38.
VIR's Forward P/E has been as high as 3,855.59 and as low as -647.04, with a median of 3.26. During the same time period, its PEG ratio has been as high as 349.87, as low as -58.71, with a median of 0.46.
Vir Biotechnology sports a P/B ratio of 1.58 as well; this compares to its industry's price-to-book ratio of 3.59. In the past 52 weeks, VIR's P/B has been as high as 8.05, as low as 1.19, with a median of 1.70.
These are only a few of the key metrics included in Biogen and Vir Biotechnology strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BIIB and VIR look like an impressive value stock at the moment.
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