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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Tenet Healthcare (THC) is a stock many investors are watching right now. THC is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.
We also note that THC holds a PEG ratio of 0.81. 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. THC's PEG compares to its industry's average PEG of 1.56. Within the past year, THC's PEG has been as high as 1.30 and as low as 0.55, with a median of 0.81.
Investors should also recognize that THC has a P/B ratio of 3.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. THC's current P/B looks attractive when compared to its industry's average P/B of 3.67. Within the past 52 weeks, THC's P/B has been as high as 3.18 and as low as 1.75, with a median of 2.55.
Finally, investors will want to recognize that THC has a P/CF ratio of 7.51. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. THC's current P/CF looks attractive when compared to its industry's average P/CF of 8.96. THC's P/CF has been as high as 7.76 and as low as 2.83, with a median of 4.42, all within the past year.
These are only a few of the key metrics included in Tenet Healthcare'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, THC looks like an impressive value stock at the moment.
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Tenet Healthcare Corporation (THC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).