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Should Value Investors Buy CCA (CXW) Stock?


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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is CCA (CXW). CXW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.87. This compares to its industry's average Forward P/E of 15.69. Over the past year, CXW's Forward P/E has been as high as 11.82 and as low as 8.53, with a median of 10.03.

Investors should also note that CXW holds a PEG ratio of 1.81. 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 PEG compares to its industry's average PEG of 2.79. 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.

We should also highlight that CXW has a P/B ratio of 2.13. The P/B ratio is used to compare a stock's market value with 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 2.55. Over the past year, CXW's P/B has been as high as 2.16 and as low as 1.57, with a median of 1.84.

Finally, investors will want to recognize that CXW has a P/CF ratio of 9.76. 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. CXW's current P/CF looks attractive when compared to its industry's average P/CF of 13.72. Over the past 52 weeks, CXW's P/CF has been as high as 9.82 and as low as 6.95, with a median of 8.05.

These figures are just a handful of the metrics value investors tend to look at, but they help show that CCA is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CXW feels like a great value stock at the moment.


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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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