Is Humana (HUM) a high value stock right now?


JZacks Rank’s proven system focuses on earnings estimates and estimate reviews to find winning stocks. Nonetheless, we know that our readers all have their own views, so we always review the latest trends in value, growth, and momentum to find solid picks.

Given 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 measures to find stocks that they believe are undervalued by the market as a whole.

Luckily, Zacks has developed its own Style Scores system with the goal of finding stocks with specific characteristics. Value investors will be interested in the “Value” category of the system. Stocks with both “A” ratings in the Value category and high Zacks ranks are some of the strongest value stocks in the market right now.

One company to watch right now is Human (HUM). HUM currently holds a Zacks rank of #2 (buy) and a value rating of A. The stock is currently trading with a P/E ratio of 17.62. For comparison, its industry has an average P/E of 20.12. Over the past year, HUM’s Forward P/E has been as high as 22.63 and as low as 15.20, with a median of 18.23.

Investors should also note that HUM holds a PEG ratio of 1.29. This figure is similar to the commonly used P/E ratio, with the PEG ratio also taking into account the expected growth rate of a company’s earnings. HUM’s PEG compares to its industry average PEG of 1.44. Over the past year, HUM’s PEG has been as high as 1.72 and as low as 1.13, with a median of 1.36.

Note also that HUM has a P/E ratio of 3.50. The P/B ratio is used to compare the market value of a stock with its book value, which is defined as total assets minus total liabilities. The P/B for this stock looks solid compared to its industry average P/B of 4.75. Over the past 12 months, HUM’s P/B has been as high as 4.27 and as low as 2.90, with a median of 3.57.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so it’s often seen as a better performance indicator. HUM has a P/S ratio of 0.67. This compares to its industry average P/S of 0.77.

Finally, investors should note that HUM has a P/CF ratio of 15.68. This measure takes into account a company’s operating cash flow and can be used to find undervalued stocks based on their strong cash flow outlook. This company’s current P/CF looks solid compared to its industry average P/CF of 20.20. Over the past 12 months, HUM’s P/CF has been as high as 19.41 and as low as 12.33, with a median of 16.15.

If you are looking for another solid stock of medical value – HMO, take a look at Molina Healthcare (MOH). MOH is a #2 (buy) stock with a value score of A.

Molina Healthcare is currently trading with a Forward P/E ratio of 18.12 while its PEG ratio sits at 0.96. Both of the company’s metrics compare favorably to its industry average P/E of 20.12 and average PEG ratio of 1.44.

Over the past year, the MOH P/E has been as high as 23.62, as low as 15.59, with a median of 17.64; its PEG ratio has been as high as 1.88, as low as 0.74, with a median of 1.36 over the same period.

Molina Healthcare also has a P/B ratio of 7.25; that compares to its industry’s price-to-book ratio of 4.75. Over the past 52 weeks, the MOH P/B has been as high as 7.75, as low as 5.96, with a median of 6.83.

These are just some of the key indicators included in Humana and Molina Healthcare’s strong value rating, but they help show that the stocks are likely undervalued right now. Considering its strong earnings outlook, HUM and MOH look like an impressive 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.


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