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Is CCA (CXW) a Great Value Stock 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.

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 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 CCA (CXW). CXW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.64, which compares to its industry's average of 15.86. Over the last 12 months, CXW's Forward P/E has been as high as 11.84 and as low as 8.53, with a median of 10.03.

We also note that CXW holds a PEG ratio of 1.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CXW's industry has an average PEG of 2.84 right now. Over the past 52 weeks, CXW's PEG has been as high as 1.97 and as low as 1.42, with a median of 1.67.

Another valuation metric that we should highlight is CXW's P/B ratio of 2.06. 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. CXW's current P/B looks attractive when compared to its industry's average P/B of 2.57. CXW's P/B has been as high as 2.17 and as low as 1.57, with a median of 1.84, over the past year.

Finally, investors should note that CXW has a P/CF ratio of 9.45. 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. CXW's P/CF compares to its industry's average P/CF of 13.92. Over the past year, CXW's P/CF has been as high as 9.76 and as low as 6.95, with a median of 8.02.

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


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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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