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Should Value Investors Buy Telefonica (TEF) Stock?
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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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Telefonica (TEF - Free Report) . TEF is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.59, which compares to its industry's average of 18.44. TEF's Forward P/E has been as high as 15.66 and as low as 11.65, with a median of 13.66, all within the past year.
TEF is also sporting a PEG ratio of 0.79. 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. TEF's industry has an average PEG of 1.37 right now. TEF's PEG has been as high as 0.82 and as low as 0.71, with a median of 0.77, all within the past year.
Another valuation metric that we should highlight is TEF's P/B ratio of 1.17. 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 2.43. Within the past 52 weeks, TEF's P/B has been as high as 1.23 and as low as 0.86, with a median of 1.00.
Value investors also use the P/S ratio. The P/S ratio 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. TEF has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.26.
These are only a few of the key metrics included in Telefonica'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, TEF looks like an impressive value stock at the moment.
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Should Value Investors Buy Telefonica (TEF) Stock?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Telefonica (TEF - Free Report) . TEF is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.59, which compares to its industry's average of 18.44. TEF's Forward P/E has been as high as 15.66 and as low as 11.65, with a median of 13.66, all within the past year.
TEF is also sporting a PEG ratio of 0.79. 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. TEF's industry has an average PEG of 1.37 right now. TEF's PEG has been as high as 0.82 and as low as 0.71, with a median of 0.77, all within the past year.
Another valuation metric that we should highlight is TEF's P/B ratio of 1.17. 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 2.43. Within the past 52 weeks, TEF's P/B has been as high as 1.23 and as low as 0.86, with a median of 1.00.
Value investors also use the P/S ratio. The P/S ratio 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. TEF has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.26.
These are only a few of the key metrics included in Telefonica'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, TEF looks like an impressive value stock at the moment.