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Are Investors Undervaluing Adecco SA (AHEXY) Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on is Adecco SA (AHEXY - Free Report) . AHEXY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.48 right now. For comparison, its industry sports an average P/E of 22.47. Over the past 52 weeks, AHEXY's Forward P/E has been as high as 85.96 and as low as 7.11, with a median of 18.95.

We should also highlight that AHEXY has a P/B ratio of 2.85. 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. AHEXY's current P/B looks attractive when compared to its industry's average P/B of 7.06. Over the past year, AHEXY's P/B has been as high as 3.04 and as low as 1.18, with a median of 2.39.

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. AHEXY has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.99.

These are just a handful of the figures considered in Adecco SA'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 AHEXY is an impressive value stock right now.


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