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Does Cross Country Healthcare (CCRN) Make for a Suitable Value Pick Now?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Cross Country Healthcare, Inc. (CCRN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Cross Country Healthcare has a trailing twelve months PE ratio of 18.83. This level compares considerably favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 19.72.
If we focus on the long-term trend of the stock the current level puts Cross Country Healthcare’s current PE near its lows. Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE also compares favorably with the Business Services sector’s trailing twelve months PE ratio, which stands at 23.66. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Cross Country Healthcare has a P/S ratio of about 0.52. This is much lower than the Business Services sector average, which comes in at 4.06x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, CCRN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Cross Country Healthcare currently has a Value Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Cross Country Healthcare a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Cross Country Healthcare is just 1.08, a level that is far lower than the sector average of 1.79. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, CCRN is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Cross Country Healthcare might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘A’. This gives CCRN a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Cross Country Healthcare seems to have pretty striking prospects. Meanwhile, the company’s earnings estimates have been mixed at best. The current quarter has seen no estimate go higher in the past sixty days compared to two lower, while the full year estimate has seen two upward revisions and one downward revision in the same time period.
This has had meaningful impact on the consensus estimate as the current quarter consensus estimate has declined 10.5% over the past two months, while the full year estimate has increased 8.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Cross Country Healthcare, Inc. Price and Consensus
Cross Country Healthcare has just a Zacks Rank #3 (Hold), which indicates that while analysts have some apprehensions about the stock in the immediate future, the stock’s growth story might be good over the long term. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Cross Country Healthcare is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front.
However, it forms a part of the staffing industry which currently carries a sluggish industry rank (among the Bottom 28% out of more than 250 industries). Combining this with a Zacks Rank #3 makes it hard to get excited about the company overall.
In fact, over the past two years, the staffing industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
Image: Bigstock
Does Cross Country Healthcare (CCRN) Make for a Suitable Value Pick Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Cross Country Healthcare, Inc. (CCRN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Cross Country Healthcare has a trailing twelve months PE ratio of 18.83. This level compares considerably favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 19.72.
If we focus on the long-term trend of the stock the current level puts Cross Country Healthcare’s current PE near its lows. Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE also compares favorably with the Business Services sector’s trailing twelve months PE ratio, which stands at 23.66. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Cross Country Healthcare has a P/S ratio of about 0.52. This is much lower than the Business Services sector average, which comes in at 4.06x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, CCRN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Cross Country Healthcare currently has a Value Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Cross Country Healthcare a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Cross Country Healthcare is just 1.08, a level that is far lower than the sector average of 1.79. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, CCRN is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Cross Country Healthcare might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘A’. This gives CCRN a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Cross Country Healthcare seems to have pretty striking prospects.
Meanwhile, the company’s earnings estimates have been mixed at best. The current quarter has seen no estimate go higher in the past sixty days compared to two lower, while the full year estimate has seen two upward revisions and one downward revision in the same time period.
This has had meaningful impact on the consensus estimate as the current quarter consensus estimate has declined 10.5% over the past two months, while the full year estimate has increased 8.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Cross Country Healthcare, Inc. Price and Consensus
Cross Country Healthcare, Inc. Price and Consensus | Cross Country Healthcare, Inc. Quote
Cross Country Healthcare has just a Zacks Rank #3 (Hold), which indicates that while analysts have some apprehensions about the stock in the immediate future, the stock’s growth story might be good over the long term. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Cross Country Healthcare is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front.
However, it forms a part of the staffing industry which currently carries a sluggish industry rank (among the Bottom 28% out of more than 250 industries). Combining this with a Zacks Rank #3 makes it hard to get excited about the company overall.
In fact, over the past two years, the staffing industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
Learn the secret >>