Zacks.com featured highlights StoneCo, Centene, CVS Health and Pfizer
For Immediate Release
Chicago, IL – June 4, 2025 – The stocks in this week’s article are StoneCo Ltd. STNE, Centene Corporation CNC, CVS Health Corporation CVS and Pfizer Inc. PFE.
Top 4 Value Stocks to Buy as Trade Tensions Still Cloud H2 Outlook
The second half of 2025 has kicked off on a cautious note. While U.S. stocks opened June in positive territory, geopolitical tensions, particularly between the United States and China, continue to cast a shadow over the global economic outlook. Markets saw modest gains as investors brushed aside fresh accusations between the two superpowers regarding the breakdown of a temporary trade agreement.
The S&P 500 edged up by 0.41%, closing at 5,935.94, while the Nasdaq Composite showed a stronger performance with a 0.67% increase, settling at 19,242.61. The Dow Jones Industrial Average also inched higher by 35.41 points, or 0.08%, ending the day at 42,305.48.
This backdrop of rising uncertainty makes a compelling case for value investing. When evaluating value stocks, one of the most effective valuation metrics is the Price to Cash Flow (P/CF) ratio. This metric measures the market price of a stock relative to the cash flow the company generates on a per-share basis. A lower P/CF ratio indicates that the stock is trading at a better value, offering strong cash generation potential relative to its price. Here are four companies — StoneCo Ltd., Centene Corporation, CVS Health Corporation and Pfizer Inc.
Price to Cash Flow Reveals Financial Health
Questions may arise as to why we are considering the P/CF valuation metric when the most widely used metric is Price/Earnings (or P/E). Well, what makes P/CF stand out is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, reflecting a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. It is net cash flow that reveals how much money a company is actually generating and how effectively management is putting the same to use.
A positive cash flow indicates an increase in the company’s liquid assets. This gives the company the means to settle debt, shell out for its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Then again, a negative cash flow implies a decline in the company’s liquidity, which lowers its flexibility to support these moves.
Here are four of the 14 value stocks that qualified the screening:
Stone, a leading provider of financial technology and software solutions, sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 6.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Stone’s current financial year sales and earnings per share (EPS) suggests growth of 10.9% and 5.9%, respectively, from the year-ago period. STNE has a Value Score of B. Shares of STNE have risen 5.9% in the past year.
Centene, a leading healthcare enterprise, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 25.5%, on average. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for Centene’s current financial year sales and EPS implies growth of 10.2% and 1.4%, respectively, from the year-ago period. Centene has a Value Score of A. Shares of Centene have declined 21.7% in the past year.
CVS Health, a leading health solutions company, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 18.1%, on average.
The Zacks Consensus Estimate for CVS Health’s current financial-year sales and EPS suggests growth of 3.5% and 12.6%, respectively, from the year-ago period. CVS Health has a Value Score of A. Shares of CVS have jumped 5.6% in the past year.
Pfizer, which develops, manufactures, markets, distributes and sells biopharmaceutical products, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 43.5%, on average.
The Zacks Consensus Estimate for Pfizer’s current financial year sales and EPS calls for a decline of 0.6% and 1.6%, respectively, from the year-ago period. Pfizer has a Value Score of A. Shares of PFE have fallen 20.4% in the past year.
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