Is HP (HPQ) a Great Value Stock 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.
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.
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 company value investors might notice is HP (HPQ). HPQ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.36, which compares to its industry's average of 24.77. Over the past year, HPQ's Forward P/E has been as high as 10.72 and as low as 7.05, with a median of 8.78.
Investors should also note that HPQ holds a PEG ratio of 0.66. 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. HPQ's industry has an average PEG of 1.94 right now. Within the past year, HPQ's PEG has been as high as 4.30 and as low as 0.59, with a median of 1.19.
Finally, investors will want to recognize that HPQ has a P/CF ratio of 7.72. 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. HPQ's current P/CF looks attractive when compared to its industry's average P/CF of 27.45. HPQ's P/CF has been as high as 11.14 and as low as 6.54, with a median of 8.39, all within the past year.
These are just a handful of the figures considered in HP'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 HPQ is an impressive value stock right now.
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