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Are Investors Undervaluing Cigna (CI) Right Now?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Cigna (CI). CI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another valuation metric that we should highlight is CI's P/B ratio of 1.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.13. CI's P/B has been as high as 1.98 and as low as 1.34, with a median of 1.73, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CI has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.75.

Another great Insurance - Multi line stock you could consider is Prudential (PUK), which is a # 2 (Buy) stock with a Value Score of A.

Prudential is currently trading with a Forward P/E ratio of 8.51 while its PEG ratio sits at 0.95. Both of the company's metrics compare favorably to its industry's average P/E of 9.28 and average PEG ratio of 0.92.

Over the last 12 months, PUK's P/E has been as high as 17.77, as low as 8.10, with a median of 11.32, and its PEG ratio has been as high as 1.97, as low as 0.90, with a median of 1.26.

Additionally, Prudential has a P/B ratio of 1.72 while its industry's price-to-book ratio sits at 2.13. For PUK, this valuation metric has been as high as 3.53, as low as 1.64, with a median of 2.15 over the past year.

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


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