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Should Value Investors Buy Arrow Electronics (ARW) Stock?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is Arrow Electronics (ARW - Free Report) . ARW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.03, which compares to its industry's average of 11.22. Over the last 12 months, ARW's Forward P/E has been as high as 11.80 and as low as 9.46, with a median of 10.53.
Investors will also notice that ARW has a PEG ratio of 0.50. 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. ARW's PEG compares to its industry's average PEG of 0.59. Over the last 12 months, ARW's PEG has been as high as 1.58 and as low as 0.49, with a median of 1.20.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. ARW has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.34.
Finally, investors should note that ARW has a P/CF ratio of 9.56. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.76. ARW's P/CF has been as high as 11.29 and as low as -89.39, with a median of 9.57, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arrow Electronics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARW feels like a great value stock at the moment.
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Should Value Investors Buy Arrow Electronics (ARW) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company value investors might notice is Arrow Electronics (ARW - Free Report) . ARW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.03, which compares to its industry's average of 11.22. Over the last 12 months, ARW's Forward P/E has been as high as 11.80 and as low as 9.46, with a median of 10.53.
Investors will also notice that ARW has a PEG ratio of 0.50. 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. ARW's PEG compares to its industry's average PEG of 0.59. Over the last 12 months, ARW's PEG has been as high as 1.58 and as low as 0.49, with a median of 1.20.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. ARW has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.34.
Finally, investors should note that ARW has a P/CF ratio of 9.56. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.76. ARW's P/CF has been as high as 11.29 and as low as -89.39, with a median of 9.57, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arrow Electronics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARW feels like a great value stock at the moment.