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Should Value Investors Buy Intel (INTC) 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 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 stock to keep an eye on is Intel (INTC - Free Report) . INTC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.09. This compares to its industry's average Forward P/E of 16.04. INTC's Forward P/E has been as high as 14.83 and as low as 10.63, with a median of 13.56, all within the past year.

We also note that INTC holds a PEG ratio of 1.32. 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. INTC's industry currently sports an average PEG of 1.92. Over the past 52 weeks, INTC's PEG has been as high as 1.76 and as low as 1.26, with a median of 1.61.

We should also highlight that INTC has a P/B ratio of 3.13. 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 4.83. INTC's P/B has been as high as 3.81 and as low as 2.54, with a median of 3.21, over the past year.

Finally, we should also recognize that INTC has a P/CF ratio of 10.21. 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 15.19. INTC's P/CF has been as high as 14.04 and as low as 8.65, with a median of 11.37, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Intel is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INTC feels like a great value stock at the moment.


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