Yahoo Finance Should Value Investors Buy Teva Pharmaceutical Industries (TEVA) 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, 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 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 stock to keep an eye on is Teva Pharmaceutical Industries (TEVA). TEVA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.46. This compares to its industry's average Forward P/E of 10.12. Over the last 12 months, TEVA's Forward P/E has been as high as 6.46 and as low as 2.99, with a median of 4.12.
Investors should also note that TEVA holds a PEG ratio of 1.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TEVA's PEG compares to its industry's average PEG of 2.07. Over the last 12 months, TEVA's PEG has been as high as 2.57 and as low as 0.77, with a median of 1.27.
Investors should also recognize that TEVA has a P/B ratio of 2.21. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.86. Within the past 52 weeks, TEVA's P/B has been as high as 2.21 and as low as 0.94, with a median of 1.45.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TEVA has a P/S ratio of 1.14. This compares to its industry's average P/S of 1.9.
These are just a handful of the figures considered in Teva Pharmaceutical Industries'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 TEVA is an impressive value stock right now.
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Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report
