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Should Value Investors Buy Science Applications International (SAIC) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One company to watch right now is Science Applications International (SAIC - Free Report) . SAIC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.89. This compares to its industry's average Forward P/E of 29.11. Over the past year, SAIC's Forward P/E has been as high as 17.39 and as low as 10.50, with a median of 13.86.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SAIC has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.92.

These are only a few of the key metrics included in Science Applications International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SAIC looks like an impressive value stock at the moment.


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