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FLEX vs. TRMB: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Electronics - Miscellaneous Products stocks have likely encountered both Flex (FLEX - Free Report) and Trimble Navigation (TRMB - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Flex has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FLEX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

FLEX currently has a forward P/E ratio of 10.32, while TRMB has a forward P/E of 31.76. We also note that FLEX has a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRMB currently has a PEG ratio of 3.18.

Another notable valuation metric for FLEX is its P/B ratio of 2.58. 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. By comparison, TRMB has a P/B of 5.22.

Based on these metrics and many more, FLEX holds a Value grade of B, while TRMB has a Value grade of D.

FLEX stands above TRMB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FLEX is the superior value option right now.


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