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Is Anthem (ANTM) a Great Value Stock Right Now?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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.

Anthem (ANTM) is a stock many investors are watching right now. ANTM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.47, while its industry has an average P/E of 18.21. ANTM's Forward P/E has been as high as 17.02 and as low as 10.62, with a median of 13.33, all within the past year.

Investors will also notice that ANTM has a PEG ratio of 0.87. 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. ANTM's industry currently sports an average PEG of 1.37. Over the past 52 weeks, ANTM's PEG has been as high as 1.30 and as low as 0.76, with a median of 0.91.

Another valuation metric that we should highlight is ANTM's P/B ratio of 2.48. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. ANTM's current P/B looks attractive when compared to its industry's average P/B of 3.75. ANTM's P/B has been as high as 2.88 and as low as 1.90, with a median of 2.37, over the past year.

Finally, investors should note that ANTM has a P/CF ratio of 14.56. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.76. ANTM's P/CF has been as high as 17.18 and as low as 11.16, with a median of 14.11, all within the past year.

These are only a few of the key metrics included in Anthem'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, ANTM looks like an impressive value stock at the moment.

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