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Are Investors Undervaluing CCA (CXW) Right Now?


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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 CCA (CXW). CXW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.92 right now. For comparison, its industry sports an average P/E of 15.86. Over the past year, CXW's Forward P/E has been as high as 12.69 and as low as 8.53, with a median of 10.03.

CXW is also sporting a PEG ratio of 1.82. 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. CXW's industry has an average PEG of 2.91 right now. Over the past 52 weeks, CXW's PEG has been as high as 2.11 and as low as 1.42, with a median of 1.67.

Another notable valuation metric for CXW is its P/B ratio of 2.04. 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 2.49. Within the past 52 weeks, CXW's P/B has been as high as 2.32 and as low as 1.57, with a median of 1.84.

Finally, our model also underscores that CXW has a P/CF ratio of 9.23. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CXW's current P/CF looks attractive when compared to its industry's average P/CF of 15.60. Over the past 52 weeks, CXW's P/CF has been as high as 9.26 and as low as 6.95, with a median of 8.

These are just a handful of the figures considered in CCA'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 CXW is an impressive value stock right now.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: CXW



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