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Should Value Investors Buy Arrow Electronics (ARW) 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.
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.
One company value investors might notice is Arrow Electronics (ARW - Free Report) . ARW is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.44, which compares to its industry's average of 13.16. Over the past year, ARW's Forward P/E has been as high as 11.05 and as low as 8.04, with a median of 9.71.
Investors will also notice that ARW has a PEG ratio of 0.46. 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. ARW's industry currently sports an average PEG of 0.51. Within the past year, ARW's PEG has been as high as 0.55 and as low as 0.40, with a median of 0.49.
Another valuation metric that we should highlight is ARW's P/B ratio of 0.98. The P/B ratio pits a stock's market value against 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 2.24. Over the past year, ARW's P/B has been as high as 1.22 and as low as 0.78, with a median of 1.02.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ARW has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.52.
Finally, investors will want to recognize that ARW has a P/CF ratio of 9.63. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.72. ARW's P/CF has been as high as 11.55 and as low as 8.13, with a median of 10.03, all within the past year.
These are only a few of the key metrics included in Arrow Electronics'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, ARW looks like an impressive value stock at the moment.
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Should Value Investors Buy Arrow Electronics (ARW) 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.
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.
One company value investors might notice is Arrow Electronics (ARW - Free Report) . ARW is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.44, which compares to its industry's average of 13.16. Over the past year, ARW's Forward P/E has been as high as 11.05 and as low as 8.04, with a median of 9.71.
Investors will also notice that ARW has a PEG ratio of 0.46. 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. ARW's industry currently sports an average PEG of 0.51. Within the past year, ARW's PEG has been as high as 0.55 and as low as 0.40, with a median of 0.49.
Another valuation metric that we should highlight is ARW's P/B ratio of 0.98. The P/B ratio pits a stock's market value against 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 2.24. Over the past year, ARW's P/B has been as high as 1.22 and as low as 0.78, with a median of 1.02.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ARW has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.52.
Finally, investors will want to recognize that ARW has a P/CF ratio of 9.63. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.72. ARW's P/CF has been as high as 11.55 and as low as 8.13, with a median of 10.03, all within the past year.
These are only a few of the key metrics included in Arrow Electronics'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, ARW looks like an impressive value stock at the moment.