We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing Hewlett Packard (HPE) Right Now?
Read MoreHide Full Article
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Hewlett Packard (HPE - Free Report) . HPE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.04, while its industry has an average P/E of 14.34. Over the last 12 months, HPE's Forward P/E has been as high as 8.37 and as low as 5.65, with a median of 7.16.
Investors will also notice that HPE has a PEG ratio of 1.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HPE's PEG compares to its industry's average PEG of 2.39. Over the past 52 weeks, HPE's PEG has been as high as 2.25 and as low as 1.33, with a median of 1.71.
Another notable valuation metric for HPE is its P/B ratio of 1.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.05. Over the past year, HPE's P/B has been as high as 1.11 and as low as 0.75, with a median of 0.95.
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. HPE has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.53.
Finally, investors will want to recognize that HPE has a P/CF ratio of 4.97. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.54. HPE's P/CF has been as high as 5.21 and as low as 2.54, with a median of 4.52, all within the past year.
Investors could also keep in mind NCR , an Computer - Integrated Systems stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
NCR sports a P/B ratio of 2.35 as well; this compares to its industry's price-to-book ratio of 3.05. In the past 52 weeks, NCR's P/B has been as high as 3.48, as low as 1.77, with a median of 2.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hewlett Packard and NCR are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HPE and NCR feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing Hewlett Packard (HPE) 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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Hewlett Packard (HPE - Free Report) . HPE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.04, while its industry has an average P/E of 14.34. Over the last 12 months, HPE's Forward P/E has been as high as 8.37 and as low as 5.65, with a median of 7.16.
Investors will also notice that HPE has a PEG ratio of 1.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HPE's PEG compares to its industry's average PEG of 2.39. Over the past 52 weeks, HPE's PEG has been as high as 2.25 and as low as 1.33, with a median of 1.71.
Another notable valuation metric for HPE is its P/B ratio of 1.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.05. Over the past year, HPE's P/B has been as high as 1.11 and as low as 0.75, with a median of 0.95.
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. HPE has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.53.
Finally, investors will want to recognize that HPE has a P/CF ratio of 4.97. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.54. HPE's P/CF has been as high as 5.21 and as low as 2.54, with a median of 4.52, all within the past year.
Investors could also keep in mind NCR , an Computer - Integrated Systems stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
NCR sports a P/B ratio of 2.35 as well; this compares to its industry's price-to-book ratio of 3.05. In the past 52 weeks, NCR's P/B has been as high as 3.48, as low as 1.77, with a median of 2.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hewlett Packard and NCR are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HPE and NCR feels like a great value stock at the moment.