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, 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 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 company to watch right now is Centene (CNC). CNC is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.35, which compares to its industry's average of 15.68. Over the past 52 weeks, CNC's Forward P/E has been as high as 13.40 and as low as 4.41, with a median of 8.43.
We also note that CNC holds a PEG ratio of 0.82. 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 PEG compares to its industry's average PEG of 0.87. CNC's PEG has been as high as 0.98 and as low as 0.38, with a median of 0.77, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CNC has a P/S ratio of 0.16. This compares to its industry's average P/S of 0.3.
Value investors will likely look at more than just these metrics, but the above data helps show that Centene is likely undervalued currently. And when considering the strength of its earnings outlook, CNC sticks out as one of the market's strongest value stocks.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Centene Corporation (CNC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).