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FLEX vs. TRMB: Which Stock Should Value Investors Buy Now?

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·2 min read
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  • TRMB
  • FLEX

Investors interested in stocks from the Electronics - Miscellaneous Products sector have probably already heard of Flex (FLEX) and Trimble Navigation (TRMB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Flex has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FLEX has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

FLEX currently has a forward P/E ratio of 10.95, while TRMB has a forward P/E of 32.29. We also note that FLEX has a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRMB currently has a PEG ratio of 3.23.

Another notable valuation metric for FLEX is its P/B ratio of 2.70. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TRMB has a P/B of 5.37.

Based on these metrics and many more, FLEX holds a Value grade of A, while TRMB has a Value grade of C.

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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