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Is CCA (CXW) Stock Undervalued 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 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 CCA (CXW). CXW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.74 right now. For comparison, its industry sports an average P/E of 16.99. Over the last 12 months, CXW's Forward P/E has been as high as 11.35 and as low as 7.28, with a median of 9.23.

Investors will also notice that CXW has a PEG ratio of 1.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CXW's PEG compares to its industry's average PEG of 2.79. Over the last 12 months, CXW's PEG has been as high as 1.89 and as low as 1.21, with a median of 1.65.

We should also highlight that CXW has a P/B ratio of 1.82. The P/B is a method of comparing a stock's market value to 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 2.52. CXW's P/B has been as high as 2.15 and as low as 1.46, with a median of 1.79, over the past year.

Finally, our model also underscores that CXW has a P/CF ratio of 8.04. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CXW's current P/CF looks attractive when compared to its industry's average P/CF of 16.62. Over the past year, CXW's P/CF has been as high as 9.82 and as low as 6.47, with a median of 8.03.

These are just a handful of the figures considered in CCA's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CXW is an impressive value stock right now.

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