Should Value Investors Buy Herbalife Ltd (HLF) 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 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.

One company to watch right now is Herbalife Ltd (HLF). HLF is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 4.21, which compares to its industry's average of 7.48. Over the last 12 months, HLF's Forward P/E has been as high as 5.54 and as low as 3.01, with a median of 4.25.

Finally, investors should note that HLF has a P/CF ratio of 2.12. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. HLF's P/CF compares to its industry's average P/CF of 4.54. Within the past 12 months, HLF's P/CF has been as high as 4.26 and as low as 1.39, with a median of 2.19.

These are only a few of the key metrics included in Herbalife Ltd's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HLF looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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