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Are Investors Undervaluing Humana (HUM) 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.
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 - Free Report) . HUM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.74. This compares to its industry's average Forward P/E of 17.38. Over the past year, HUM's Forward P/E has been as high as 20.50 and as low as 14.05, with a median of 17.91.
Investors should also note that HUM holds a PEG ratio of 1.09. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HUM's industry has an average PEG of 1.33 right now. HUM's PEG has been as high as 1.49 and as low as 1.04, with a median of 1.29, all within the past year.
Another valuation metric that we should highlight is HUM's P/B ratio of 3.36. Investors use the P/B ratio to look at a stock's market value versus 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 4.05. Over the past 12 months, HUM's P/B has been as high as 4.37 and as low as 3.19, with a median of 3.98.
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. HUM has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.61.
Finally, investors will want to recognize that HUM has a P/CF ratio of 14.14. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 15.96. Over the past year, HUM's P/CF has been as high as 19.76 and as low as 13.41, with a median of 16.69.
Value investors will likely look at more than just these metrics, but the above data helps show that Humana is likely undervalued currently. And when considering the strength of its earnings outlook, HUM sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing Humana (HUM) Right Now?
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.
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 - Free Report) . HUM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.74. This compares to its industry's average Forward P/E of 17.38. Over the past year, HUM's Forward P/E has been as high as 20.50 and as low as 14.05, with a median of 17.91.
Investors should also note that HUM holds a PEG ratio of 1.09. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HUM's industry has an average PEG of 1.33 right now. HUM's PEG has been as high as 1.49 and as low as 1.04, with a median of 1.29, all within the past year.
Another valuation metric that we should highlight is HUM's P/B ratio of 3.36. Investors use the P/B ratio to look at a stock's market value versus 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 4.05. Over the past 12 months, HUM's P/B has been as high as 4.37 and as low as 3.19, with a median of 3.98.
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. HUM has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.61.
Finally, investors will want to recognize that HUM has a P/CF ratio of 14.14. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 15.96. Over the past year, HUM's P/CF has been as high as 19.76 and as low as 13.41, with a median of 16.69.
Value investors will likely look at more than just these metrics, but the above data helps show that Humana is likely undervalued currently. And when considering the strength of its earnings outlook, HUM sticks out at as one of the market's strongest value stocks.