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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Anthem (ANTM). ANTM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.34 right now. For comparison, its industry sports an average P/E of 14.92. Over the past year, ANTM’s Forward P/E has been as high as 15.54 and as low as 7.54, with a median of 11.64.
ANTM is also sporting a PEG ratio of 0.71. 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. ANTM’s industry has an average PEG of 1.11 right now. ANTM’s PEG has been as high as 1.11 and as low as 0.49, with a median of 0.79, all within the past year.
We should also highlight that ANTM has a P/B ratio of 1.86. 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 company’s current P/B looks solid when compared to its industry’s average P/B of 3.46. Over the past year, ANTM’s P/B has been as high as 2.48 and as low as 1.40, with a median of 2.13.
Finally, we should also recognize that ANTM has a P/CF ratio of 9.29. 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. This stock’s P/CF looks attractive against its industry’s average P/CF of 14.45. Within the past 12 months, ANTM’s P/CF has been as high as 14.56 and as low as 7.59, with a median of 11.73.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Anthem is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANTM feels like a great value stock at the moment.
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Anthem, Inc. (ANTM): Free Stock Analysis Report
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