Amid the Russia-Ukraine war, concerns over rising economic sanctions and the ban on importing Russian oil have caused the benchmark stock indexes to decline into correction territory. Although the U.K. and the U.S. announced that they have…
sufficient oil supplies to meet demand in the near future, the stock market is expected to remain in a bearish mood for the foreseeable future due to deepening supply chain disruptions and rising inflation.
Given this backdrop, high-quality value stocks are attracting investors’ attention because they tend to resist market downturns. This is evidenced by the American Century STOXX U.S. Quality Value ETF’s (VALQ) 9.7% gains over the past year.
We think fundamentally strong stocks Anthem, Inc. (ANTM – Get Rating), Cigna Corporation (CI – Get Rating), América Móvil, S.A.B. de C.V. (AMX – Get Rating), Emcor Group, Inc. (EME – Get Rating), and Crane Co. (CR – Get Rating) look undervalued at the current price levels. So, it could be wise to bet on them now.
Anthem, Inc. (ANTM – Get Rating)
ANTM in Indianapolis, Ind., is a health benefits company that offers a broad spectrum of network-based managed care plans and services to large and small groups, individuals, Medicaid, and Medicare markets. The company provides an array of specialty and other insurance products and services, such as pharmacy and radiology benefits management, dental, vision, life and disability insurance benefits, and analytics-driven personal health care.
On Nov. 10, 2021, ANTM agreed to acquire Integra Managed Care, a Managed Long-Term Care Plan designed for adults living with long-term disabilities. Currently serving more than 40,000 Medicaid members, Integra’s acquisition aligns with ANTM’s goal of growing its Medicaid business and will be added to ANTM’s Government Business Division upon the closure of the acquisition by the end of the 2022 second quarter.
For its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, ANTM’s total revenues came in at $138.64 billion, representing a 13.8% year-over-year improvement. The company’s pre-tax income came in at $7.93 billion for the quarter, indicating a 27% year-over-year improvement. While its adjusted net earnings increased 98% year-over-year to $1.26 billion, its adjusted EPS rose 102.4% to $5.14. The company had $4.88 billion in cash and cash equivalents as of Dec. 31, 2021.
Analysts expect ANTM’s EPS to improve 9.6% year-over-year to $28.47 for its fiscal year 2022, ending Dec. 31, 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $152.84 billion consensus revenue for the same fiscal year represents an 11.6% rise from the prior-year period. ANTM’s EPS is expected to grow at a 12.9% rate per annum over the next five years.
Over the past year, the stock has gained 34.3% in price and closed yesterday’s trading session at $456.07. ANTM’s trailing-12-month gross profit margin, ROE, and ROTC are 26%, 17.6%, and 9.8%, respectively.
Its 15.97x non-GAAP forward P/E is 21.4% lower than the 20.31x industry average. And in terms of forward EV/EBIT, ANTM is currently trading at 13.78x, which is 21.2% lower than the 17.49x industry average.
ANTM’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a B grade for Growth, Stability, Value, Sentiment, and Quality. Click here to see the additional ratings for ANTM’s Momentum.
ANTM is ranked #1 of 11 stocks in the B-rated Medical – Health Insurance industry.
Cigna Corporation (CI – Get Rating)
CI is a health services company based in Bloomfield, Conn., that offers medical, dental insurance, and related products and services. The company distributes its products and services through insurance brokers and consultants, directly to employers, and through private and public exchanges.
On Dec. 20, 2021, CI, and Spartanburg Regional Healthcare System, one of South Carolina’s largest healthcare systems, reached a multi-year agreement that enables CI customers to gain access to Spartanburg Regional’s hospitals, facilities, and physician network for quality care, effective Jan.1, 2022. Both companies expect to deliver affordable and high-quality care to the upstate community.
For its fiscal year 2021 second quarter, ended Dec. 31, 2021, CI’s adjusted revenues increased 9.6% year-over-year to $45.68 billion. The company’s adjusted income from operations came in at $1.57 billion, up 24.1% from the prior-year period. CI’s EPS increased 35.9% year-over-year to $4.77. And as of Dec. 31, 2021, the company had $5.08 billion in cash and cash equivalents.
The $22.49 consensus EPS estimate for its fiscal year 2022, ending Dec. 31, 2022, represents a 9.9% year-over-year improvement. It surpassed the Street’s EPS estimates in each of the trailing four quarters, which is impressive. Analysts expect the company’s revenue to be $179.04 billion for the same quarter, indicating a 2.9% rise from the prior-year period. CI’s EPS is expected to grow at an 11.2% rate per annum over the next five years.
CI stock has declined 2.9% in price over the past year and ended yesterday’s trading session at $229.10. Its trailing-12-month gross profit margin, ROE, and ROTC are 13.3%, 11.1%, and 6.3%, respectively.
In terms of non-GAAP forward P/E, CI is currently trading at 10.58x, which is 47.9% lower than the 20.31x industry average. And in terms of forward EV/EBIT, CI is currently trading at 12.73x, which is 27.2% lower than the 17.49x industry average.
CI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, Stability, Sentiment, and Quality. Click here to see the additional ratings for CI’s Momentum.
CI is ranked #3 of 11 stocks in the B-rated Medical – Health Insurance industry.
América Móvil, S.A.B. de C.V. (AMX – Get Rating)
AMX is a Mexico City, Mexico-based telecommunications services company that offers mobile and fixed-line voice services, wireless and fixed data services, internet access and pay television, sales of equipment, accessories, computers, and other related services worldwide. It sells its brands through a network of retailers and service centers to retail customers and sales force to corporate customers.
On Sept. 29, 2021, AMX and leading telecommunications company Liberty Latin America Ltd. (LILA) agreed to…
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