Are Investors Undervaluing Avnet (AVT) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Avnet (AVT). AVT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.87, which compares to its industry's average of 9.27. Over the last 12 months, AVT's Forward P/E has been as high as 17.81 and as low as 8.77, with a median of 14.91.
AVT is also sporting a PEG ratio of 0.35. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AVT's PEG compares to its industry's average PEG of 0.42. AVT's PEG has been as high as 1 and as low as 0.35, with a median of 0.77, all within the past year.
We should also highlight that AVT has a P/B ratio of 0.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. AVT's current P/B looks attractive when compared to its industry's average P/B of 1.46. Over the past 12 months, AVT's P/B has been as high as 1.13 and as low as 0.65, with a median of 0.97.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AVT has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.31.
Finally, our model also underscores that AVT has a P/CF ratio of 10.05. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.67. AVT's P/CF has been as high as 14.24 and as low as 6.97, with a median of 11.15, all within the past year.
These are only a few of the key metrics included in Avnet'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, AVT looks like an impressive value stock at the moment.
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Avnet, Inc. (AVT): Free Stock Analysis Report
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