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.
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 to watch right now is Cardinal Health (CAH). CAH is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 15.48. This compares to its industry's average Forward P/E of 19.37. Over the past year, CAH's Forward P/E has been as high as 20.15 and as low as 13.69, with a median of 15.30.
Investors should also note that CAH holds a PEG ratio of 1.24. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CAH's PEG compares to its industry's average PEG of 2.23. Over the last 12 months, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, we should also recognize that CAH has a P/CF ratio of 15.27. 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. CAH's current P/CF looks attractive when compared to its industry's average P/CF of 19.23. CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12, all within the past year.
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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