Should Value Investors Buy Flex (FLEX) Stock?
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 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.
Flex (FLEX) is a stock many investors are watching right now. FLEX 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 8.22, while its industry has an average P/E of 13.69. Over the past year, FLEX's Forward P/E has been as high as 10.20 and as low as 6.28, with a median of 8.09.
FLEX is also sporting a PEG ratio of 0.60. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FLEX's industry currently sports an average PEG of 1.47. FLEX's PEG has been as high as 0.82 and as low as 0.42, with a median of 0.56, all within the past year.
We should also highlight that FLEX has a P/B ratio of 2.09. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. FLEX's current P/B looks attractive when compared to its industry's average P/B of 4.23. Over the past year, FLEX's P/B has been as high as 2.60 and as low as 1.58, with a median of 2.02.
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. FLEX has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.69.
Finally, we should also recognize that FLEX has a P/CF ratio of 6.77. 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 9.73. FLEX's P/CF has been as high as 6.98 and as low as 4.70, with a median of 5.74, all within the past year.
These are only a few of the key metrics included in Flex'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, FLEX looks like an impressive value stock at the moment.
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