Is Anthem (ANTM) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company value investors might notice is Anthem (ANTM). ANTM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.45, while its industry has an average P/E of 14.63. Over the last 12 months, ANTM's Forward P/E has been as high as 17.02 and as low as 11.69, with a median of 15.40.
ANTM is also sporting a PEG ratio of 0.91. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ANTM's PEG compares to its industry's average PEG of 1.09. Over the last 12 months, ANTM's PEG has been as high as 1.42 and as low as 0.80, with a median of 1.24.
Investors should also recognize that ANTM has a P/B ratio of 2.40. 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. This stock's P/B looks solid versus its industry's average P/B of 3.29. ANTM's P/B has been as high as 2.88 and as low as 2.03, with a median of 2.39, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Anthem is likely undervalued currently. And when considering the strength of its earnings outlook, ANTM sticks out at as one of the market's strongest value stocks.
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