Should Value Investors Buy OSI Systems (OSIS) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is OSI Systems (OSIS). OSIS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.75, which compares to its industry's average of 21.96. Over the past year, OSIS's Forward P/E has been as high as 27.63 and as low as 10.73, with a median of 20.72.
OSIS is also sporting a PEG ratio of 1.02. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OSIS's industry has an average PEG of 1.83 right now. Within the past year, OSIS's PEG has been as high as 2.21 and as low as 0.86, with a median of 1.66.
Investors should also recognize that OSIS has a P/B ratio of 2.12. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.56. Within the past 52 weeks, OSIS's P/B has been as high as 3.92 and as low as 1.78, with a median of 3.38.
Finally, investors will want to recognize that OSIS has a P/CF ratio of 8.50. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. OSIS's current P/CF looks attractive when compared to its industry's average P/CF of 12.13. OSIS's P/CF has been as high as 17.87 and as low as 7.13, with a median of 13.67, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that OSI Systems is likely undervalued currently. And when considering the strength of its earnings outlook, OSIS sticks out at as one of the market's strongest value stocks.
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