Is Celestica (CLS) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Celestica (CLS). CLS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.47. This compares to its industry's average Forward P/E of 11.63. Over the past 52 weeks, CLS's Forward P/E has been as high as 16.31 and as low as 3.61, with a median of 9.85.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CLS has a P/S ratio of 0.14. This compares to its industry's average P/S of 0.24.
Finally, we should also recognize that CLS has a P/CF ratio of 6.21. 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. CLS's current P/CF looks attractive when compared to its industry's average P/CF of 6.35. CLS's P/CF has been as high as 9.09 and as low as 1.77, with a median of 6.09, 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 Celestica is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLS feels like a great value stock at the moment.
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