Yahoo Finance Are Investors Undervaluing Koninklijke Philips (PHG) Right Now?
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, 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Koninklijke Philips (PHG). PHG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 16.66 right now. For comparison, its industry sports an average P/E of 20.45. Over the past 52 weeks, PHG's Forward P/E has been as high as 18.71 and as low as 12.29, with a median of 14.35.
PHG is also sporting a PEG ratio of 1.32. 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. PHG's PEG compares to its industry's average PEG of 2.23. PHG's PEG has been as high as 1.32 and as low as 0.88, with a median of 0.94, all within the past year.
Investors should also recognize that PHG has a P/B ratio of 1.91. The P/B ratio pits a stock's market value against 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 4.66. Within the past 52 weeks, PHG's P/B has been as high as 1.91 and as low as 1.28, with a median of 1.47.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PHG has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.74.
Value investors will likely look at more than just these metrics, but the above data helps show that Koninklijke Philips is likely undervalued currently. And when considering the strength of its earnings outlook, PHG sticks out at as one of the market's strongest value stocks.
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Koninklijke Philips N.V. (PHG) : Free Stock Analysis Report
