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. Nevertheless, we are always paying attention to...
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 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.
One stock to keep an eye on is Avnet (AVT). AVT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.41. This compares to its industry's average Forward P/E of 9.15. AVT's Forward P/E has been as high as 17.28 and as low as 8.05, with a median of 13.77, all within the past year.
Investors should 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 PEG compares to its industry's average PEG of 0.42. AVT's PEG has been as high as 0.91 and as low as 0.32, with a median of 0.68, all within the past year.
Another valuation metric that we should highlight is AVT's P/B ratio of 0.92. Investors use the P/B ratio to look at a stock's market value versus 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 1.48. Over the past year, 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 love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.33.
Finally, investors should note that AVT has a P/CF ratio of 7.53. 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 stock's P/CF looks attractive against its industry's average P/CF of 11.84. AVT's P/CF has been as high as 14.24 and as low as 7.19, 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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