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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is CDW (CDW - Free Report) . CDW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.65, which compares to its industry's average of 19.38. CDW's Forward P/E has been as high as 19.65 and as low as 13.65, with a median of 16.67, all within the past year.
We also note that CDW holds a PEG ratio of 1.35. 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. CDW's industry has an average PEG of 1.84 right now. Over the last 12 months, CDW's PEG has been as high as 1.45 and as low as 1.34, with a median of 1.35.
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. CDW has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.93.
Finally, we should also recognize that CDW has a P/CF ratio of 16.83. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 40.92. Over the past year, CDW's P/CF has been as high as 18.41 and as low as 12.26, with a median of 15.42.
These are just a handful of the figures considered in CDW's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CDW is an impressive value stock right now.
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Is CDW (CDW) Stock Undervalued Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is CDW (CDW - Free Report) . CDW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.65, which compares to its industry's average of 19.38. CDW's Forward P/E has been as high as 19.65 and as low as 13.65, with a median of 16.67, all within the past year.
We also note that CDW holds a PEG ratio of 1.35. 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. CDW's industry has an average PEG of 1.84 right now. Over the last 12 months, CDW's PEG has been as high as 1.45 and as low as 1.34, with a median of 1.35.
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. CDW has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.93.
Finally, we should also recognize that CDW has a P/CF ratio of 16.83. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 40.92. Over the past year, CDW's P/CF has been as high as 18.41 and as low as 12.26, with a median of 15.42.
These are just a handful of the figures considered in CDW's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CDW is an impressive value stock right now.