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Are Investors Undervaluing Centene (CNC) Right Now?
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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.
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 - Free Report) . CNC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.64 right now. For comparison, its industry sports an average P/E of 19.18. CNC's Forward P/E has been as high as 16.12 and as low as 11.24, with a median of 14.52, all within the past year.
CNC is also sporting a PEG ratio of 0.89. 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. CNC's PEG compares to its industry's average PEG of 1.33. Within the past year, CNC's PEG has been as high as 1.38 and as low as 0.89, with a median of 1.12.
Another notable valuation metric for CNC is its P/B ratio of 1.70. 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 company's current P/B looks solid when compared to its industry's average P/B of 4.53. Over the past year, CNC's P/B has been as high as 2.13 and as low as 1.36, with a median of 1.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNC has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.69.
Finally, we should also recognize that CNC has a P/CF ratio of 13.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.06. CNC's P/CF has been as high as 22.99 and as low as 13.25, with a median of 16.73, all within the past year.
Humana (HUM - Free Report) may be another strong Medical - HMOs stock to add to your shortlist. HUM is a # 2 (Buy) stock with a Value grade of A.
Humana is currently trading with a Forward P/E ratio of 18.05 while its PEG ratio sits at 1.31. Both of the company's metrics compare favorably to its industry's average P/E of 19.18 and average PEG ratio of 1.33.
Over the last 12 months, HUM's P/E has been as high as 22.63, as low as 15.20, with a median of 17.87, and its PEG ratio has been as high as 1.68, as low as 1.13, with a median of 1.31.
Furthermore, Humana holds a P/B ratio of 4.01 and its industry's price-to-book ratio is 4.53. HUM's P/B has been as high as 4.10, as low as 2.90, with a median of 3.63 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Centene and Humana are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNC and HUM feels like a great value stock at the moment.
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Are Investors Undervaluing Centene (CNC) Right Now?
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.
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 - Free Report) . CNC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.64 right now. For comparison, its industry sports an average P/E of 19.18. CNC's Forward P/E has been as high as 16.12 and as low as 11.24, with a median of 14.52, all within the past year.
CNC is also sporting a PEG ratio of 0.89. 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. CNC's PEG compares to its industry's average PEG of 1.33. Within the past year, CNC's PEG has been as high as 1.38 and as low as 0.89, with a median of 1.12.
Another notable valuation metric for CNC is its P/B ratio of 1.70. 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 company's current P/B looks solid when compared to its industry's average P/B of 4.53. Over the past year, CNC's P/B has been as high as 2.13 and as low as 1.36, with a median of 1.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNC has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.69.
Finally, we should also recognize that CNC has a P/CF ratio of 13.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.06. CNC's P/CF has been as high as 22.99 and as low as 13.25, with a median of 16.73, all within the past year.
Humana (HUM - Free Report) may be another strong Medical - HMOs stock to add to your shortlist. HUM is a # 2 (Buy) stock with a Value grade of A.
Humana is currently trading with a Forward P/E ratio of 18.05 while its PEG ratio sits at 1.31. Both of the company's metrics compare favorably to its industry's average P/E of 19.18 and average PEG ratio of 1.33.
Over the last 12 months, HUM's P/E has been as high as 22.63, as low as 15.20, with a median of 17.87, and its PEG ratio has been as high as 1.68, as low as 1.13, with a median of 1.31.
Furthermore, Humana holds a P/B ratio of 4.01 and its industry's price-to-book ratio is 4.53. HUM's P/B has been as high as 4.10, as low as 2.90, with a median of 3.63 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Centene and Humana are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNC and HUM feels like a great value stock at the moment.