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Is Bae Systems (BAESY) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

Bae Systems (BAESY - Free Report) is a stock many investors are watching right now. BAESY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.54, which compares to its industry's average of 21.18. Over the past 52 weeks, BAESY's Forward P/E has been as high as 16.04 and as low as 10.65, with a median of 13.63.

BAESY is also sporting a PEG ratio of 1.10. 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. BAESY's industry has an average PEG of 2.11 right now. Within the past year, BAESY's PEG has been as high as 3.65 and as low as 0.91, with a median of 1.95.

Value investors will likely look at more than just these metrics, but the above data helps show that Bae Systems is likely undervalued currently. And when considering the strength of its earnings outlook, BAESY sticks out at as one of the market's strongest value stocks.


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