Are Investors Undervaluing Anthem (ANTM) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Anthem (ANTM). ANTM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.71, which compares to its industry's average of 18.89. ANTM's Forward P/E has been as high as 15.35 and as low as 9.96, with a median of 12.50, all within the past year.
ANTM is also sporting a PEG ratio of 1.16. 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. ANTM's PEG compares to its industry's average PEG of 1.46. Over the last 12 months, ANTM's PEG has been as high as 1.21 and as low as 0.68, with a median of 0.92.
We should also highlight that ANTM has a P/B ratio of 2.85. 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 4.11. Over the past 12 months, ANTM's P/B has been as high as 2.90 and as low as 1.79, with a median of 2.33.
These are only a few of the key metrics included in Anthem's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ANTM looks like an impressive value stock at the moment.
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