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FLEX vs. TRMB: Which Stock Is the Better Value Option?

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Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Flex (FLEX - Free Report) and Trimble Navigation (TRMB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Flex has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that FLEX likely has seen a stronger improvement to its earnings outlook than TRMB has recently. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

FLEX currently has a forward P/E ratio of 10.51, while TRMB has a forward P/E of 33.92. We also note that FLEX has a PEG ratio of 0.88. 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. TRMB currently has a PEG ratio of 3.39.

Another notable valuation metric for FLEX is its P/B ratio of 2.65. 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. By comparison, TRMB has a P/B of 5.73.

These are just a few of the metrics contributing to FLEX's Value grade of A and TRMB's Value grade of D.

FLEX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FLEX is likely the superior value option right now.


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