Are Investors Undervaluing Cardinal Health (CAH) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.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.Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.Cardinal Health (CAH) is a stock many investors are watching right now. CAH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 15.13, which compares to its industry's average of 17.98. Over the past 52 weeks, CAH's Forward P/E has been as high as 15.13 and as low as 12.37, with a median of 14.08.Investors should also note that CAH holds a PEG ratio of 1.48. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CAH's industry currently sports an average PEG of 2. Within the past year, CAH's PEG has been as high as 1.55 and as low as 0.86, with a median of 1.04.Finally, we should also recognize that CAH has a P/CF ratio of 15.04. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.08. Over the past 52 weeks, CAH's P/CF has been as high as 31.82 and as low as 13.34, with a median of 19.31.McKesson (MCK) may be another strong Medical - Dental Supplies stock to add to your shortlist. MCK is a # 2 (Buy) stock with a Value grade of A.Shares of McKesson currently holds a Forward P/E ratio of 17.65, and its PEG ratio is 1.25. In comparison, its industry sports average P/E and PEG ratios of 17.98 and 2.MCK's price-to-earnings ratio has been as high as 19.54 and as low as 14.23, with a median of 16.75, while its PEG ratio has been as high as 1.65 and as low as 1.06, with a median of 1.39, all within the past year.McKesson also has a P/B ratio of -30.21 compared to its industry's price-to-book ratio of 4.74. Over the past year, its P/B ratio has been as high as -23.67, as low as -59.19, with a median of -42.95.Value investors will likely look at more than just these metrics, but the above data helps show that Cardinal Health and McKesson are likely undervalued currently. And when considering the strength of its earnings outlook, CAH and MCK sticks out as one of the market's strongest value stocks.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cardinal Health, Inc. (CAH): Free Stock Analysis Report McKesson Corporation (MCK): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks