The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One stock to keep an eye on is DaVita HealthCare (DVA - Free Report) . DVA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.91, while its industry has an average P/E of 18.96. DVA's Forward P/E has been as high as 22.86 and as low as 13.81, with a median of 15.42, all within the past year.
Investors will also notice that DVA has a PEG ratio of 0.76. 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. DVA's industry currently sports an average PEG of 1.43. Within the past year, DVA's PEG has been as high as 15.77 and as low as 0.76, with a median of 0.92.
Another valuation metric that we should highlight is DVA's P/B ratio of 2.83. 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 solid versus its industry's average P/B of 3.67. DVA's P/B has been as high as 3 and as low as 2.07, with a median of 2.65, over the past year.
Finally, investors will want to recognize that DVA has a P/CF ratio of 10.46. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.47. Within the past 12 months, DVA's P/CF has been as high as 11.88 and as low as 7.83, with a median of 10.10.
These figures are just a handful of the metrics value investors tend to look at, but they help show that DaVita HealthCare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DVA feels like a great value stock at the moment.