Yahoo Finance Is Tenet Healthcare (THC) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Tenet Healthcare (THC). THC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We also note that THC holds a PEG ratio of 1.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. THC's PEG compares to its industry's average PEG of 1.27. Over the last 12 months, THC's PEG has been as high as 5.16 and as low as 1.18, with a median of 2.92.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. THC has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.82.
Finally, we should also recognize that THC has a P/CF ratio of 3.75. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. THC's current P/CF looks attractive when compared to its industry's average P/CF of 6.97. Over the past 52 weeks, THC's P/CF has been as high as 7.24 and as low as 2.61, with a median of 5.29.
Investors could also keep in mind Universal Health Services (UHS), an Medical - Hospital stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Universal Health Services is currently trading with a Forward P/E ratio of 12.50 while its PEG ratio sits at 0.82. Both of the company's metrics compare favorably to its industry's average P/E of 14.37 and average PEG ratio of 1.27.
UHS's price-to-earnings ratio has been as high as 15.12 and as low as 10.83, with a median of 12.65, while its PEG ratio has been as high as 1.87 and as low as 0.71, with a median of 1.19, all within the past year.
Universal Health Services also has a P/B ratio of 1.92 compared to its industry's price-to-book ratio of 14.40. Over the past year, its P/B ratio has been as high as 2.04, as low as 1.39, with a median of 1.72.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tenet Healthcare and Universal Health Services are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THC and UHS feels like a great value stock at the moment.
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Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
