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Are Investors Undervaluing Cardinal Health (CAH) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Cardinal Health (CAH). CAH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.29. This compares to its industry's average Forward P/E of 17.67. Over the last 12 months, CAH's Forward P/E has been as high as 14.81 and as low as 9.50, with a median of 13.02.

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CAH is also sporting a PEG ratio of 1.07. 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. CAH's industry currently sports an average PEG of 1.45. Within the past year, CAH's PEG has been as high as 8.89 and as low as 0.99, with a median of 1.26.

Finally, our model also underscores that CAH has a P/CF ratio of 18.87. 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. This stock's P/CF looks attractive against its industry's average P/CF of 21.15. CAH's P/CF has been as high as 19.29 and as low as -81.38, with a median of -51.93, all within the past year.

These are only a few of the key metrics included in Cardinal Health's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CAH looks like an impressive value stock at the moment.

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Cardinal Health, Inc. (CAH) : Free Stock Analysis Report

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Zacks Investment Research