Is Humana (HUM) Stock Undervalued Right Now?

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 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 Humana (HUM). HUM 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 17.05 right now. For comparison, its industry sports an average P/E of 19.61. HUM's Forward P/E has been as high as 22.63 and as low as 15.20, with a median of 17.77, all within the past year.

Investors should also note that HUM holds a PEG ratio of 1.27. 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. HUM's PEG compares to its industry's average PEG of 1.35. Over the last 12 months, HUM's PEG has been as high as 1.68 and as low as 1.13, with a median of 1.30.

We should also highlight that HUM has a P/B ratio of 3.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.58. Over the past 12 months, HUM's P/B has been as high as 4.09 and as low as 2.90, with a median of 3.58.

Finally, investors will want to recognize that HUM has a P/CF ratio of 14.83. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.23. HUM's P/CF has been as high as 18.09 and as low as 12.81, with a median of 15.50, all within the past year.

These are just a handful of the figures considered in Humana'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 HUM 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.