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Is CCA (CXW) 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 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 value investors might notice is CCA (CXW). CXW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.08, which compares to its industry’s average of 15.22. CXW’s Forward P/E has been as high as 11.76 and as low as 8.53, with a median of 10.03, all within the past year.

Investors should also note that CXW holds a PEG ratio of 1.68. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. CXW’s PEG compares to its industry’s average PEG of 2.74. Over the last 12 months, CXW’s PEG has been as high as 1.96 and as low as 1.42, with a median of 1.67.

Investors should also recognize that CXW has a P/B ratio of 1.99. 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 2.53. Over the past 12 months, CXW’s P/B has been as high as 2.16 and as low as 1.57, with a median of 1.84.

Finally, investors should note that CXW has a P/CF ratio of 9.06. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CXW’s P/CF compares to its industry’s average P/CF of 15.65. Over the past 52 weeks, CXW’s P/CF has been as high as 9.82 and as low as 6.95, with a median of 8.05.

These are only a few of the key metrics included in CCA’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, CXW looks like an impressive value stock at the moment.

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