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Is Humana (HUM) a Great Value Stock Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Humana (HUM - Free Report) . HUM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 18.23 right now. For comparison, its industry sports an average P/E of 20.60. Over the past year, HUM's Forward P/E has been as high as 22.63 and as low as 15.20, with a median of 17.68.

HUM is also sporting a PEG ratio of 1.36. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HUM's industry currently sports an average PEG of 1.42. Within the past year, HUM's PEG has been as high as 1.68 and as low as 1.13, with a median of 1.30.

Another notable valuation metric for HUM is its P/B ratio of 3.98. The P/B ratio is used to compare a stock's market value with 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 4.78. HUM's P/B has been as high as 4.09 and as low as 2.90, with a median of 3.57, over the past year.

Finally, investors should note that HUM has a P/CF ratio of 15.78. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HUM's current P/CF looks attractive when compared to its industry's average P/CF of 19.05. Over the past 52 weeks, HUM's P/CF has been as high as 18.09 and as low as 12.81, with a median of 15.52.

These are just a handful of the figures considered in Humana'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 HUM is an impressive value stock right now.


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