Is CNA Financial (CNA) Stock Undervalued Right Now?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is CNA Financial (CNA). CNA is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.86. This compares to its industry's average Forward P/E of 25.88. CNA's Forward P/E has been as high as 11.66 and as low as 8.36, with a median of 9.03, all within the past year.
We also note that CNA holds a PEG ratio of 1.77. 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. CNA's PEG compares to its industry's average PEG of 2.44. Within the past year, CNA's PEG has been as high as 2.33 and as low as 1.67, with a median of 1.81.
Investors should also recognize that CNA has a P/B ratio of 1.32. 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. CNA's current P/B looks attractive when compared to its industry's average P/B of 1.46. CNA's P/B has been as high as 1.42 and as low as 1.13, with a median of 1.25, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNA has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.06.
These are just a handful of the figures considered in CNA Financial'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 CNA is an impressive value stock right now.
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CNA Financial Corporation (CNA) : Free Stock Analysis Report
