Investing in the stock market and achieving long-term success is a common goal for both new and experienced investors. To navigate the market with confidence, many investors rely on specific methodologies to guide their buying and selling decisions. One useful tool for identifying winning stocks based on individual investment preferences is the Zacks Style Scores. These scores rate stocks according to three popular investing types: value, growth, and momentum.
For value investors, the goal is to find stocks that are trading below their intrinsic value. They look for good stocks at discounted prices before the broader market recognizes their true worth. The Value Style Score utilizes important ratios such as Price/Earnings (P/E), Price/Earnings to Growth (PEG), Price/Sales, and Price/Cash Flow to identify attractive and undervalued stocks.
One company that stands out as a potential value stock is Prestige Consumer Healthcare Inc. (PBH). Based in New York, Prestige Consumer Healthcare develops, manufactures, and markets over-the-counter healthcare and household cleaning products in various international markets, including the United States, Canada, and Australia. The company distributes its products through mass merchandisers, drugstores, convenience stores, and online channels.
Prestige Consumer Healthcare has a Zacks Rank #2 (Buy), a Value Style Score of B, and a VGM Score of B. Compared to the Medical – Products industry’s average P/E ratio of 18.5X, PBH is trading at a forward P/E of 13.3X, indicating that it may be undervalued. Additionally, PBH has a PEG ratio of 1.7, a Price/Cash Flow ratio of 11.5X, and a Price/Sales ratio of 2.5X.
Earnings play a significant role in value investing, and PBH has shown positive trends in this aspect. Over the past 60 days, two analysts have revised their earnings estimate upwards for PBH. The Zacks Consensus Estimate predicts earnings of $4.31 per share for 2024, reflecting a $0.01 increase. PBH also boasts an average earnings surprise of 3.2% per share.
Considering its impressive earnings growth, attractive valuation metrics, strong Zacks Rank, and favorable Value and VGM Style Scores, PBH should be on the radar of investors seeking potential value stocks.
For more investment recommendations and insights, download the free report “7 Best Stocks for the Next 30 Days” from Zacks Investment Research.
Definitions:
– Value Investor: An investor who seeks out stocks that are trading below their intrinsic value, indicating they may be undervalued.
– Zacks Style Scores: Indicators used to rate stocks based on three popular investing types: value, growth, and momentum.
– P/E Ratio: Price-to-Earnings ratio calculates the price of a stock relative to its earnings per share.
– PEG Ratio: Price/Earnings to Growth ratio measures the relationship between a stock’s price-to-earnings ratio and its expected earnings growth.
– Price/Sales Ratio: A ratio that compares a company’s stock price to its revenue per share.
– Price/Cash Flow Ratio: A valuation ratio that compares a company’s stock price to its cash flow per share.
– Zacks Consensus Estimate: The average earnings estimate of a company based on brokerages and analysts surveyed by Zacks Investment Research.
Sources:
– Zacks Investment Research