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Should Value Investors Buy Telefonica (TEF) Stock?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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.
Telefonica (TEF - Free Report) is a stock many investors are watching right now. 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 12.6, which compares to its industry's average of 18.47. TEF's Forward P/E has been as high as 15.66 and as low as 11.65, with a median of 13.60, all within the past year.
Investors should also note that TEF holds a PEG ratio of 0.57. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TEF's industry has an average PEG of 0.93 right now. Over the last 12 months, TEF's PEG has been as high as 0.82 and as low as 0.57, with a median of 0.74.
Investors should also recognize that TEF has a P/B ratio of 1.25. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.45. Over the past year, TEF's P/B has been as high as 1.36 and as low as 0.86, with a median of 1.05.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TEF has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.36.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Telefonica is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TEF feels like a great value stock at the moment.
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Should Value Investors Buy Telefonica (TEF) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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.
Telefonica (TEF - Free Report) is a stock many investors are watching right now. 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 12.6, which compares to its industry's average of 18.47. TEF's Forward P/E has been as high as 15.66 and as low as 11.65, with a median of 13.60, all within the past year.
Investors should also note that TEF holds a PEG ratio of 0.57. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TEF's industry has an average PEG of 0.93 right now. Over the last 12 months, TEF's PEG has been as high as 0.82 and as low as 0.57, with a median of 0.74.
Investors should also recognize that TEF has a P/B ratio of 1.25. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.45. Over the past year, TEF's P/B has been as high as 1.36 and as low as 0.86, with a median of 1.05.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TEF has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.36.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Telefonica is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TEF feels like a great value stock at the moment.