Is Grifols (GRFS) Stock Undervalued Right Now?

·3-min read

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Grifols (GRFS) is a stock many investors are watching right now. GRFS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We should also highlight that GRFS has a P/B ratio of 0.71. 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 stock's P/B looks attractive against its industry's average P/B of 1.18. Within the past 52 weeks, GRFS's P/B has been as high as 1.05 and as low as 0.46, with a median of 0.71.

Finally, investors will want to recognize that GRFS has a P/CF ratio of 4.61. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. GRFS's current P/CF looks attractive when compared to its industry's average P/CF of 9.80. Over the past year, GRFS's P/CF has been as high as 7.74 and as low as 4.56, with a median of 6.56.

Takeda Pharmaceutical Co. (TAK) may be another strong Medical - Drugs stock to add to your shortlist. TAK is a # 2 (Buy) stock with a Value grade of A.

Takeda Pharmaceutical Co. is trading at a forward earnings multiple of 7.32 at the moment, with a PEG ratio of 0.67. This compares to its industry's average P/E of 154.92 and average PEG ratio of 7.40.

Over the last 12 months, TAK's P/E has been as high as 14.67, as low as 5.52, with a median of 6.59, and its PEG ratio has been as high as 0.69, as low as 0.51, with a median of 0.58.

Takeda Pharmaceutical Co. also has a P/B ratio of 1.12 compared to its industry's price-to-book ratio of 1.18. Over the past year, its P/B ratio has been as high as 1.15, as low as 0.80, with a median of 0.90.

Value investors will likely look at more than just these metrics, but the above data helps show that Grifols and Takeda Pharmaceutical Co. are likely undervalued currently. And when considering the strength of its earnings outlook, GRFS and TAK sticks out as one of the market's strongest value stocks.

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