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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Cardinal Health (CAH). CAH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors will also notice that CAH has a PEG ratio of 1.73. 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 1.74. Over the past 52 weeks, CAH's PEG has been as high as 1.73 and as low as 0.94, with a median of 1.44.
Finally, investors will want to recognize that CAH has a P/CF ratio of 17.26. 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 17.67. Within the past 12 months, CAH's P/CF has been as high as 19.48 and as low as 13.22, with a median of 15.23.
Labcorp (LH) may be another strong Medical - Dental Supplies stock to add to your shortlist. LH is a # 2 (Buy) stock with a Value grade of A.
Labcorp is trading at a forward earnings multiple of 14.61 at the moment, with a PEG ratio of 1.55. This compares to its industry's average P/E of 16.34 and average PEG ratio of 1.74.
LH's price-to-earnings ratio has been as high as 15.79 and as low as 12.57, with a median of 14.42, while its PEG ratio has been as high as 1.88 and as low as 1.37, with a median of 1.62, all within the past year.
Furthermore, Labcorp holds a P/B ratio of 2.51 and its industry's price-to-book ratio is 4.59. LH's P/B has been as high as 2.67, as low as 2.04, with a median of 2.36 over the past 12 months.
These are only a few of the key metrics included in Cardinal Health and Labcorp strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CAH and LH look like an impressive value stock at the moment.
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Cardinal Health, Inc. (CAH): Free Stock Analysis Report Labcorp (LH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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