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Are Investors Undervaluing ADEIA INC (ADEA) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company to watch right now is ADEIA INC (ADEA - Free Report) . ADEA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that ADEA has a P/B ratio of 3.43. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 6.11. ADEA's P/B has been as high as 3.95 and as low as 0.77, with a median of 1.23, over the past year.
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. ADEA has a P/S ratio of 1.23. This compares to its industry's average P/S of 1.91.
Another great Technology Services stock you could consider is Vontier (VNT - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Vontier is currently trading with a Forward P/E ratio of 9.66 while its PEG ratio sits at 3.40. Both of the company's metrics compare favorably to its industry's average P/E of 59.16 and average PEG ratio of 3.48.
Over the last 12 months, VNT's P/E has been as high as 9.66, as low as 5.33, with a median of 7.48, and its PEG ratio has been as high as 4.16, as low as 0.87, with a median of 1.44.
Furthermore, Vontier holds a P/B ratio of 7.50 and its industry's price-to-book ratio is 6.11. VNT's P/B has been as high as 8.28, as low as 5.27, with a median of 6.79 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that ADEIA INC and Vontier are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADEA and VNT feels like a great value stock at the moment.