Canada markets closed
  • S&P/TSX

    +129.42 (+0.57%)
  • S&P 500

    +30.81 (+0.55%)
  • DOW

    +247.10 (+0.62%)

    -0.0009 (-0.13%)

    +0.18 (+0.22%)
  • Bitcoin CAD

    +2,706.01 (+3.37%)
  • CMC Crypto 200

    +70.94 (+5.93%)

    -7.80 (-0.32%)
  • RUSSELL 2000

    +23.23 (+1.09%)
  • 10-Yr Bond

    -0.0040 (-0.10%)
  • NASDAQ futures

    +18.00 (+0.09%)

    -0.46 (-3.56%)
  • FTSE

    +29.57 (+0.36%)
  • NIKKEI 225

    -1,033.32 (-2.45%)

    -0.0020 (-0.30%)

Should Value Investors Buy AmerisourceBergen (ABC) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

AmerisourceBergen (ABC) is a stock many investors are watching right now. ABC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.77, while its industry has an average P/E of 18.39. Over the past year, ABC's Forward P/E has been as high as 14.90 and as low as 11.77, with a median of 13.22.


Finally, investors should note that ABC has a P/CF ratio of 13.69. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 25.61. Over the past year, ABC's P/CF has been as high as 14.67 and as low as 10.91, with a median of 13.02.

Investors could also keep in mind Cardinal Health (CAH), an Medical - Dental Supplies stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of Cardinal Health currently holds a Forward P/E ratio of 13.18, and its PEG ratio is 1.14. In comparison, its industry sports average P/E and PEG ratios of 18.39 and 1.56.

Over the past year, CAH's P/E has been as high as 14.81, as low as 9.50, with a median of 12.76; its PEG ratio has been as high as 8.89, as low as 0.99, with a median of 1.58 during the same time period.

Cardinal Health also has a P/B ratio of -9.51 compared to its industry's price-to-book ratio of 6.80. Over the past year, its P/B ratio has been as high as -8.18, as low as -27.58, with a median of -11.58.

These are only a few of the key metrics included in AmerisourceBergen and Cardinal Health strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ABC and CAH look like an impressive value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report

Cardinal Health, Inc. (CAH) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research