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Is Anthem (ANTM) Stock Undervalued Right Now?

Zacks Equity Research
Xcel (XEL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

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.

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.

One stock to keep an eye on is Anthem (ANTM). ANTM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.01. This compares to its industry's average Forward P/E of 15.59. Over the past year, ANTM's Forward P/E has been as high as 17.02 and as low as 13.85, with a median of 15.36.

Investors should also note that ANTM holds a PEG ratio of 1.09. 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. ANTM's industry has an average PEG of 1.16 right now. Over the last 12 months, ANTM's PEG has been as high as 1.42 and as low as 1.08, with a median of 1.29.

Investors should also recognize that ANTM has a P/B ratio of 2.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.43. Over the past 12 months, ANTM's P/B has been as high as 2.88 and as low as 2.08, with a median of 2.36.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Anthem is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANTM feels like a great value stock at the moment.


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