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Is Humana (HUM) Stock Undervalued 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Humana (HUM - Free Report) is a stock many investors are watching right now. HUM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.77, while its industry has an average P/E of 16.80. Over the past 52 weeks, HUM's Forward P/E has been as high as 20.50 and as low as 16.25, with a median of 18.04.

Investors should also recognize that HUM has a P/B ratio of 4. 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 4.04. Over the past 12 months, HUM's P/B has been as high as 4.37 and as low as 3.46, with a median of 3.97.

These are only a few of the key metrics included in Humana's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HUM looks like an impressive value stock at the moment.


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