Is Cardinal Health (CAH) Stock Undervalued 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, 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.
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.
One stock to keep an eye on is Cardinal Health (CAH). CAH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.22, which compares to its industry's average of 17.36. Over the last 12 months, CAH's Forward P/E has been as high as 14.91 and as low as 12.37, with a median of 13.80.
Investors should also note that CAH holds a PEG ratio of 1.48. 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. CAH's industry has an average PEG of 1.80 right now. Over the last 12 months, CAH's PEG has been as high as 1.55 and as low as 0.86, with a median of 0.97.
Finally, investors will want to recognize that CAH has a P/CF ratio of 17.30. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.14. Over the past year, CAH's P/CF has been as high as 29.43 and as low as 14.64, with a median of 18.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Cardinal Health is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAH feels like a great value stock at the moment.
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Cardinal Health, Inc. (CAH) : Free Stock Analysis Report