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Is Cardinal Health (CAH) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One stock to keep an eye on is Cardinal Health (CAH - Free Report) . CAH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.75 right now. For comparison, its industry sports an average P/E of 19.09. Over the past year, CAH's Forward P/E has been as high as 11.21 and as low as 8.12, with a median of 9.33.

We also note that CAH holds a PEG ratio of 1.42. 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. CAH's PEG compares to its industry's average PEG of 1.98. Over the past 52 weeks, CAH's PEG has been as high as 1.82 and as low as 1.31, with a median of 1.52.

Value investors will likely look at more than just these metrics, but the above data helps show that Cardinal Health is likely undervalued currently. And when considering the strength of its earnings outlook, CAH sticks out at as one of the market's strongest value stocks.


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