Are Investors Undervaluing Tenet Healthcare (THC) Right Now?

Zacks Equity Research
·2 min read

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Tenet Healthcare (THC). THC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 15.50, which compares to its industry's average of 21.02. Over the past 52 weeks, THC's Forward P/E has been as high as 18.64 and as low as 3.63, with a median of 11.58.

Another notable valuation metric for THC is its P/B ratio of 9.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 23.19. Over the past 12 months, THC's P/B has been as high as 9.30 and as low as 2.37, with a median of 4.87.

Value investors will likely look at more than just these metrics, but the above data helps show that Tenet Healthcare is likely undervalued currently. And when considering the strength of its earnings outlook, THC sticks out at as one of the market's strongest value stocks.


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