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Should Value Investors Buy Adecco (AHEXY) 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, 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Adecco (AHEXY - Free Report) . AHEXY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.33, while its industry has an average P/E of 15.75. Over the last 12 months, AHEXY's Forward P/E has been as high as 12.18 and as low as 6.87, with a median of 9.72.

AHEXY is also sporting a PEG ratio of 1.26. 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. AHEXY's PEG compares to its industry's average PEG of 1.78. Over the past 52 weeks, AHEXY's PEG has been as high as 4.56 and as low as 0.71, with a median of 1.08.

Finally, investors should note that AHEXY has a P/CF ratio of 9.65. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.02. Over the past year, AHEXY's P/CF has been as high as 9.88 and as low as 6.31, with a median of 8.29.

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


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