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Should Value Investors Buy These Computer and Technology Stocks?
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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.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Celestica (CLS - Free Report) is a stock many investors are watching right now. CLS 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 8.38, which compares to its industry's average of 9.95. Over the past 52 weeks, CLS's Forward P/E has been as high as 9.54 and as low as 6.49, with a median of 7.66.
We also note that CLS holds a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CLS's industry has an average PEG of 0.88 right now. CLS's PEG has been as high as 2.11 and as low as 0.33, with a median of 0.77, all within the past year.
Another valuation metric that we should highlight is CLS's P/B ratio of 1.06. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.51. Over the past year, CLS's P/B has been as high as 1.06 and as low as 0.63, with a median of 0.78.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. CLS has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.38.
Finally, investors will want to recognize that CLS has a P/CF ratio of 6.75. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CLS's P/CF compares to its industry's average P/CF of 7.98. Within the past 12 months, CLS's P/CF has been as high as 6.79 and as low as 4.30, with a median of 5.64.
Jabil (JBL - Free Report) may be another strong Electronics - Manufacturing Services stock to add to your shortlist. JBL is a # 2 (Buy) stock with a Value grade of A.
Shares of Jabil are currently trading at a forward earnings multiple of 9.01 and a PEG ratio of 0.75 compared to its industry's P/E and PEG ratios of 9.95 and 0.88, respectively.
JBL's price-to-earnings ratio has been as high as 11.10 and as low as 8.54, with a median of 9.97, while its PEG ratio has been as high as 0.93 and as low as 0.71, with a median of 0.83, all within the past year.
Jabil sports a P/B ratio of 3.99 as well; this compares to its industry's price-to-book ratio of 2.51. In the past 52 weeks, JBL's P/B has been as high as 4.64, as low as 2.98, with a median of 3.95.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Celestica and Jabil are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLS and JBL feels like a great value stock at the moment.
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Should Value Investors Buy These Computer and Technology Stocks?
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.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Celestica (CLS - Free Report) is a stock many investors are watching right now. CLS 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 8.38, which compares to its industry's average of 9.95. Over the past 52 weeks, CLS's Forward P/E has been as high as 9.54 and as low as 6.49, with a median of 7.66.
We also note that CLS holds a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CLS's industry has an average PEG of 0.88 right now. CLS's PEG has been as high as 2.11 and as low as 0.33, with a median of 0.77, all within the past year.
Another valuation metric that we should highlight is CLS's P/B ratio of 1.06. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.51. Over the past year, CLS's P/B has been as high as 1.06 and as low as 0.63, with a median of 0.78.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. CLS has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.38.
Finally, investors will want to recognize that CLS has a P/CF ratio of 6.75. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CLS's P/CF compares to its industry's average P/CF of 7.98. Within the past 12 months, CLS's P/CF has been as high as 6.79 and as low as 4.30, with a median of 5.64.
Jabil (JBL - Free Report) may be another strong Electronics - Manufacturing Services stock to add to your shortlist. JBL is a # 2 (Buy) stock with a Value grade of A.
Shares of Jabil are currently trading at a forward earnings multiple of 9.01 and a PEG ratio of 0.75 compared to its industry's P/E and PEG ratios of 9.95 and 0.88, respectively.
JBL's price-to-earnings ratio has been as high as 11.10 and as low as 8.54, with a median of 9.97, while its PEG ratio has been as high as 0.93 and as low as 0.71, with a median of 0.83, all within the past year.
Jabil sports a P/B ratio of 3.99 as well; this compares to its industry's price-to-book ratio of 2.51. In the past 52 weeks, JBL's P/B has been as high as 4.64, as low as 2.98, with a median of 3.95.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Celestica and Jabil are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLS and JBL feels like a great value stock at the moment.