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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 stock to keep an eye on is Cardinal Health (CAH). CAH is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Investors will also notice that CAH has a PEG ratio of 1.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CAH's PEG compares to its industry's average PEG of 1.61. Over the last 12 months, CAH's PEG has been as high as 1.88 and as low as 1.12, with a median of 1.50.
Finally, our model also underscores that CAH has a P/CF ratio of 15.58. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.72. Over the past year, CAH's P/CF has been as high as 17.91 and as low as 12.96, with a median of 15.16.
These are only a few of the key metrics included in Cardinal Health'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, CAH looks like an impressive value stock at the moment.
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Cardinal Health, Inc. (CAH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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