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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is Anthem (ANTM - Free Report) . ANTM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 16.77. This compares to its industry's average Forward P/E of 18.58. ANTM's Forward P/E has been as high as 19.22 and as low as 13.85, with a median of 15.71, all within the past year.
Investors should also note that ANTM holds a PEG ratio of 1.35. 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. ANTM's PEG compares to its industry's average PEG of 1.37. Over the last 12 months, ANTM's PEG has been as high as 1.80 and as low as 1.19, with a median of 1.33.
Another valuation metric that we should highlight is ANTM's P/B ratio of 2.60. 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 4.10. Within the past 52 weeks, ANTM's P/B has been as high as 2.60 and as low as 2.08, with a median of 2.27.
Finally, investors should note that ANTM has a P/CF ratio of 13.78. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.62. Over the past year, ANTM's P/CF has been as high as 16.19 and as low as 11.38, with a median of 12.90.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Anthem is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANTM feels like a great value stock at the moment.