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Should Value Investors Buy HCA Holdings (HCA) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 to watch right now is HCA Holdings (HCA - Free Report) . HCA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.70 right now. For comparison, its industry sports an average P/E of 14.85. Over the last 12 months, HCA's Forward P/E has been as high as 14.20 and as low as 10.41, with a median of 12.12.

Investors should also note that HCA holds a PEG ratio of 1.13. 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. HCA's industry has an average PEG of 1.23 right now. HCA's PEG has been as high as 1.20 and as low as 0.91, with a median of 1.04, all within the past year.

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

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