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Are Investors Undervaluing Humana (HUM) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Humana (HUM - Free Report) . HUM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.66. This compares to its industry's average Forward P/E of 15.83. HUM's Forward P/E has been as high as 22.59 and as low as 15.66, with a median of 19.52, all within the past year.

HUM is also sporting a PEG ratio of 1.07. 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 has an average PEG of 1.16 right now. Over the past 52 weeks, HUM's PEG has been as high as 1.81 and as low as 1.07, with a median of 1.42.

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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