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Should Value Investors Buy Anthem (ANTM) Stock?


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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

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 company value investors might notice is Anthem (ANTM). ANTM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.11, while its industry has an average P/E of 14.47. ANTM's Forward P/E has been as high as 17.02 and as low as 11.69, with a median of 15.10, all within the past year.

Investors should also note that ANTM holds a PEG ratio of 0.94. 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. ANTM's industry currently sports an average PEG of 1.09. Over the past 52 weeks, ANTM's PEG has been as high as 1.42 and as low as 0.80, with a median of 1.13.

Another valuation metric that we should highlight is ANTM's P/B ratio of 2.34. 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. This stock's P/B looks solid versus its industry's average P/B of 3.16. Within the past 52 weeks, ANTM's P/B has been as high as 2.88 and as low as 2.03, with a median of 2.44.

These are just a handful of the figures considered in Anthem'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 ANTM 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: ANTM



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