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Is Anthem (ANTM) Stock Undervalued Right Now?

Is (WM) Outperforming Other Business Services Stocks This Year?

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.

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 stock to keep an eye on is Anthem (ANTM). ANTM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 16.21. This compares to its industry's average Forward P/E of 17.96. ANTM's Forward P/E has been as high as 19.22 and as low as 13.85, with a median of 15.71, all within the past year.

We also note that ANTM holds a PEG ratio of 1.30. 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 PEG compares to its industry's average PEG of 1.37. Within the past year, ANTM's PEG has been as high as 1.80 and as low as 1.19, with a median of 1.33.

Finally, we should also recognize that ANTM has a P/CF ratio of 13.22. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.11. ANTM's P/CF has been as high as 16.19 and as low as 11.38, with a median of 12.90, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Anthem is likely undervalued currently. And when considering the strength of its earnings outlook, ANTM sticks out at as one of the market's strongest value stocks.


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