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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Centene (CNC). CNC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.49 right now. For comparison, its industry sports an average P/E of 12.62. Over the past year, CNC's Forward P/E has been as high as 11.12 and as low as 7.83, with a median of 8.92.
Investors should also note that CNC holds a PEG ratio of 0.74. 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. CNC's industry currently sports an average PEG of 1.11. Within the past year, CNC's PEG has been as high as 1.02 and as low as 0.69, with a median of 0.82.
Another valuation metric that we should highlight is CNC's P/B ratio of 1.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. CNC's current P/B looks attractive when compared to its industry's average P/B of 2.54. Over the past 12 months, CNC's P/B has been as high as 1.55 and as low as 1.03, with a median of 1.19.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CNC has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.32.
Finally, our model also underscores that CNC has a P/CF ratio of 6.66. 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. CNC's P/CF compares to its industry's average P/CF of 10.63. CNC's P/CF has been as high as 10.58 and as low as 6.11, with a median of 7.39, all within the past year.
These are just a handful of the figures considered in Centene's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CNC is an impressive value stock right now.
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Centene Corporation (CNC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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