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.
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 stock to keep an eye on is Centene (CNC - Free Report) . CNC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.24. This compares to its industry's average Forward P/E of 15.26. Over the last 12 months, CNC's Forward P/E has been as high as 18.66 and as low as 10.67, with a median of 14.84.
CNC is also sporting a PEG ratio of 0.79. 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. CNC's industry currently sports an average PEG of 1.14. CNC's PEG has been as high as 1.27 and as low as 0.79, with a median of 1.02, all within the past year.
Another notable valuation metric for CNC is its P/B ratio of 1.87. The P/B ratio pits a stock's market value against 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 3.50. Over the past year, CNC's P/B has been as high as 2.82 and as low as 1.67, with a median of 2.35.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.32. This compares to its industry's average P/S of 0.47.
Finally, investors should note that CNC has a P/CF ratio of 13.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CNC's current P/CF looks attractive when compared to its industry's average P/CF of 14.05. Over the past 52 weeks, CNC's P/CF has been as high as 23.13 and as low as 12.12, with a median of 18.36.
These are just a handful of the figures considered in Centene's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CNC is an impressive value stock right now.