Are Investors Undervaluing Anthem (ANTM) 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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Anthem (ANTM) is a stock many investors are watching right now. ANTM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.24, which compares to its industry's average of 17.25. Over the past year, ANTM's Forward P/E has been as high as 15.54 and as low as 7.54, with a median of 12.12.

Investors should also note that ANTM holds a PEG ratio of 0.77. 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 industry has an average PEG of 1.30 right now. Over the past 52 weeks, ANTM's PEG has been as high as 1.11 and as low as 0.49, with a median of 0.84.

Another notable valuation metric for ANTM is its P/B ratio of 2.12. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ANTM's current P/B looks attractive when compared to its industry's average P/B of 3.75. Over the past 12 months, ANTM's P/B has been as high as 2.58 and as low as 1.40, with a median of 2.21.

Finally, investors should note that ANTM has a P/CF ratio of 10.91. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.76. Over the past 52 weeks, ANTM's P/CF has been as high as 14.84 and as low as 7.62, with a median of 12.04.

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

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