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 to watch right now is Humana (HUM). HUM is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.
We should also highlight that HUM has a P/B ratio of 1.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.20. Within the past 52 weeks, HUM's P/B has been as high as 2.91 and as low as 1.52, with a median of 1.93.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HUM has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.35.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Humana is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HUM feels like a great value stock at the moment.
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Humana Inc. (HUM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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