Is HCA Holdings (HCA) 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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is HCA Holdings (HCA). HCA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.10, while its industry has an average P/E of 17.02. Over the last 12 months, HCA's Forward P/E has been as high as 18.84 and as low as 6.63, with a median of 12.90.
Investors should also note that HCA holds a PEG ratio of 1.20. 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. HCA's PEG compares to its industry's average PEG of 2.21. Over the last 12 months, HCA's PEG has been as high as 1.98 and as low as 0.59, with a median of 1.18.
Another valuation metric that we should highlight is HCA's P/B ratio of 21.49. 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. This stock's P/B looks attractive against its industry's average P/B of 23.19. Over the past year, HCA's P/B has been as high as 82.23 and as low as -56.83, with a median of 32.29.
These are just a handful of the figures considered in HCA Holdings'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 HCA is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research
