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Are Investors Undervaluing Sanmina (SANM) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Sanmina (SANM - Free Report) is a stock many investors are watching right now. SANM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.03, which compares to its industry's average of 11.32. Over the last 12 months, SANM's Forward P/E has been as high as 11.99 and as low as 5.55, with a median of 9.60.

Investors should also note that SANM holds a PEG ratio of 0.75. 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. SANM's industry currently sports an average PEG of 0.90. SANM's PEG has been as high as 1 and as low as 0.46, with a median of 0.80, all within the past year.

Another valuation metric that we should highlight is SANM's P/B ratio of 1.33. 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. SANM's current P/B looks attractive when compared to its industry's average P/B of 1.79. Over the past year, SANM's P/B has been as high as 1.46 and as low as 0.79, with a median of 1.14.

These are just a handful of the figures considered in Sanmina'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 SANM is an impressive value stock right now.


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