Cardinal Health (CAH) is a Top-Ranked Value Stock: Should You Buy?

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score assesses trends in stock price and earnings outlook, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for selecting stocks with the best value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to aid investors in portfolio creation [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with a 4 (Sell) or 5 (Strong Sell) rating, even with high Style Scores, are less favorable due to declining earnings forecasts [10] Company Spotlight: Cardinal Health - Cardinal Health is a global healthcare services and products distributor, operating in three segments: Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution, and Other [11] - Cardinal Health holds a 3 (Hold) Zacks Rank and a VGM Score of B, with a Value Style Score of B, supported by a forward P/E ratio of 19.82 [12] - The company has seen upward revisions in earnings estimates, with the Zacks Consensus Estimate increasing by $0.20 to $8.14 per share, and an average earnings surprise of 10.3% [12]