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FLEX or TRMB: Which Is the Better Value Stock Right Now?

·2 min read

Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Flex (FLEX) or Trimble Navigation (TRMB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Flex has a Zacks Rank of #1 (Strong Buy), while Trimble Navigation has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FLEX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

FLEX currently has a forward P/E ratio of 7.85, while TRMB has a forward P/E of 23.39. We also note that FLEX has a PEG ratio of 0.53. 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. TRMB currently has a PEG ratio of 1.85.

Another notable valuation metric for FLEX is its P/B ratio of 2.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TRMB has a P/B of 4.27.

These metrics, and several others, help FLEX earn a Value grade of A, while TRMB has been given a Value grade of D.

FLEX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FLEX is likely the superior value option right now.


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Flex Ltd. (FLEX) : Free Stock Analysis Report
 
Trimble Inc. (TRMB) : Free Stock Analysis Report
 
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Zacks Investment Research