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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Avnet (AVT) is a stock many investors are watching right now. AVT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.48, which compares to its industry's average of 8.97. AVT's Forward P/E has been as high as 17.28 and as low as 8.06, with a median of 14.32, all within the past year.
We also note that AVT holds a PEG ratio of 0.33. 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. AVT's industry has an average PEG of 0.41 right now. AVT's PEG has been as high as 0.92 and as low as 0.32, with a median of 0.75, all within the past year.
Another valuation metric that we should highlight is AVT's P/B ratio of 0.93. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.44. 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 0.98.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AVT has a P/S ratio of 0.19. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that AVT has a P/CF ratio of 9.70. 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 11.52. Over the past year, AVT's P/CF has been as high as 14.24 and as low as 7.08, with a median of 11.15.
These are just a handful of the figures considered in Avnet's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AVT is an impressive value stock right now.
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