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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company value investors might notice is Tenet Healthcare (THC). THC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
We also note that THC holds a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. THC's industry currently sports an average PEG of 1.60. Over the past 52 weeks, THC's PEG has been as high as 1.30 and as low as 0.55, with a median of 0.81.
Finally, investors will want to recognize that THC has a P/CF ratio of 7.51. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. THC's current P/CF looks attractive when compared to its industry's average P/CF of 7.65. Over the past 52 weeks, THC's P/CF has been as high as 7.76 and as low as 2.83, with a median of 4.42.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tenet Healthcare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THC feels like a great 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).