Back to top

Is Centene (CNC) Stock Undervalued Right Now?

Read MoreHide Full Article

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Centene (CNC - Free Report) is a stock many investors are watching right now. CNC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.99 right now. For comparison, its industry sports an average P/E of 14.27. Over the past 52 weeks, CNC's Forward P/E has been as high as 18.66 and as low as 10.67, with a median of 15.93.

We also note that CNC holds a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CNC's PEG compares to its industry's average PEG of 1.07. CNC's PEG has been as high as 1.27 and as low as 0.80, with a median of 1.08, all within the past year.

We should also highlight that CNC has a P/B ratio of 1.94. 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. CNC's current P/B looks attractive when compared to its industry's average P/B of 3.15. CNC's P/B has been as high as 2.96 and as low as 1.67, with a median of 2.53, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CNC has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.44.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Centene is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNC feels like a great value stock at the moment.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Centene Corporation (CNC) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in