Is Cigna (CI) 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.

Considering 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 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.

One company to watch right now is Cigna (CI). CI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Investors should also note that CI holds a PEG ratio of 0.92. 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. CI's industry currently sports an average PEG of 1.16. Over the past 52 weeks, CI's PEG has been as high as 1.09 and as low as 0.73, with a median of 0.93.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CI has a P/S ratio of 0.49. This compares to its industry's average P/S of 1.08.

Finally, investors will want to recognize that CI has a P/CF ratio of 7.26. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.31. Over the past 52 weeks, CI's P/CF has been as high as 9.76 and as low as 6.52, with a median of 7.71.

These are just a handful of the figures considered in Cigna'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 CI is an impressive value stock right now.

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