Are These Computer and Technology Stocks a Great Value Stocks Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Hewlett Packard (HPE). HPE is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.21, which compares to its industry's average of 14.04. Over the last 12 months, HPE's Forward P/E has been as high as 8.95 and as low as 6.55, with a median of 7.68.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HPE has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.66.
Finally, our model also underscores that HPE has a P/CF ratio of 3.74. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HPE's P/CF compares to its industry's average P/CF of 10.01. Over the past year, HPE's P/CF has been as high as 7.10 and as low as 3.15, with a median of 5.66.
Investors could also keep in mind International Business Machines (IBM), an Computer - Integrated Systems stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
International Business Machines is currently trading with a Forward P/E ratio of 13.38 while its PEG ratio sits at 2.25. Both of the company's metrics compare favorably to its industry's average P/E of 14.04 and average PEG ratio of 1.28.
IBM's Forward P/E has been as high as 13.38 and as low as 10.21, with a median of 11.89. During the same time period, its PEG ratio has been as high as 3.46, as low as 1.35, with a median of 1.54.
International Business Machines also has a P/B ratio of 5.54 compared to its industry's price-to-book ratio of 3.71. Over the past year, its P/B ratio has been as high as 6.28, as low as 4.64, with a median of 5.59.
Value investors will likely look at more than just these metrics, but the above data helps show that Hewlett Packard and International Business Machines are likely undervalued currently. And when considering the strength of its earnings outlook, HPE and IBM sticks out as one of the market's strongest value stocks.
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Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
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