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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Tech Data is a stock many investors are watching right now. TECD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.73, while its industry has an average P/E of 10.31. Over the past year, TECD's Forward P/E has been as high as 9.73 and as low as 6.44, with a median of 8.13.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TECD has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.25.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tech Data is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TECD feels like a great value stock at the moment.
Image: Bigstock
Are Investors Undervaluing Tech Data (TECD) 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.
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.
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.
Tech Data is a stock many investors are watching right now. TECD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.73, while its industry has an average P/E of 10.31. Over the past year, TECD's Forward P/E has been as high as 9.73 and as low as 6.44, with a median of 8.13.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TECD has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.25.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tech Data is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TECD feels like a great value stock at the moment.