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Should Value Investors Buy HCA Holdings (HCA) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

HCA Holdings (HCA - Free Report) is a stock many investors are watching right now. HCA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.13, which compares to its industry's average of 14.39. Over the past year, HCA's Forward P/E has been as high as 14.55 and as low as 10.65, with a median of 12.03.

Investors should also note that HCA holds a PEG ratio of 1.16. 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. HCA's PEG compares to its industry's average PEG of 1.31. Within the past year, HCA's PEG has been as high as 1.32 and as low as 0.90, with a median of 1.10.

These are only a few of the key metrics included in HCA Holdings'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, HCA looks like an impressive value stock at the moment.


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