Are Investors Undervaluing Northrop Grumman (NOC) 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. Nevertheless, we are always paying attention to...
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Northrop Grumman (NOC). NOC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 14.79, while its industry has an average P/E of 18.54. Over the past 52 weeks, NOC's Forward P/E has been as high as 15.29 and as low as 11.86, with a median of 13.68.
Investors will also notice that NOC has a PEG ratio of 1.65. 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. NOC's PEG compares to its industry's average PEG of 1.89. Over the last 12 months, NOC's PEG has been as high as 1.71 and as low as 1.51, with a median of 1.61.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Northrop Grumman is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NOC feels like a great value stock at the moment.
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