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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Sanmina (SANM - Free Report) is a stock many investors are watching right now. SANM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.35. This compares to its industry's average Forward P/E of 11.07. Over the past year, SANM's Forward P/E has been as high as 11.99 and as low as 5.55, with a median of 9.50.

SANM is also sporting a PEG ratio of 0.78. 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. SANM's PEG compares to its industry's average PEG of 0.88. Over the last 12 months, SANM's PEG has been as high as 1 and as low as 0.46, with a median of 0.79.

Investors should also recognize that SANM has a P/B ratio of 1.38. 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. This stock's P/B looks solid versus 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 figures are just a handful of the metrics value investors tend to look at, but they help show that Sanmina is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SANM feels like a great value stock at the moment.


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