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Should Value Investors Buy Visteon (VC) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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.

Visteon (VC - Free Report) is a stock many investors are watching right now. VC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.69. This compares to its industry's average Forward P/E of 18.36. Over the last 12 months, VC's Forward P/E has been as high as 14.33 and as low as 8.02, with a median of 10.34.

We should also highlight that VC has a P/B ratio of 2.27. 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 stock's P/B looks solid versus its industry's average P/B of 3.30. Over the past year, VC's P/B has been as high as 2.34 and as low as 1.31, with a median of 1.87.

Value investors also use the P/S ratio. The P/S ratio 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. VC has a P/S ratio of 0.71. This compares to its industry's average P/S of 0.76.

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


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