Should Value Investors Buy Merck KGaA (MKKGY) Stock?

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.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.Merck KGaA (MKKGY) is a stock many investors are watching right now. MKKGY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. Investors should also recognize that MKKGY has a P/B ratio of 0.51. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.43. Over the past year, MKKGY's P/B has been as high as 0.79 and as low as 0.49, with a median of 0.57.Finally, investors will want to recognize that MKKGY has a P/CF ratio of 6.31. 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. MKKGY's P/CF compares to its industry's average P/CF of 12.82. Over the past year, MKKGY's P/CF has been as high as 16.19 and as low as 5.95, with a median of 6.94.Value investors will likely look at more than just these metrics, but the above data helps show that Merck KGaA is likely undervalued currently. And when considering the strength of its earnings outlook, MKKGY sticks out as one of the market's strongest value stocks.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks