Yahoo Finance Is Tenet Healthcare (THC) a Great Value Stock 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One stock to keep an eye on is Tenet Healthcare (THC). THC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.14 right now. For comparison, its industry sports an average P/E of 14.20. THC's Forward P/E has been as high as 14.22 and as low as 5.79, with a median of 9.40, all within the past year.
THC is also sporting a PEG ratio of 0.71. 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. THC's industry currently sports an average PEG of 1.18. Within the past year, THC's PEG has been as high as 1.10 and as low as 0.32, with a median of 0.55.
Finally, our model also underscores that THC has a P/CF ratio of 3.01. 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 6.01. Over the past year, THC's P/CF has been as high as 6.42 and as low as 2.15, with a median of 3.19.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tenet Healthcare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THC feels like a great value stock at the moment.
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