Are Investors Undervaluing Adecco (AHEXY) 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.
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.
One company to watch right now is Adecco (AHEXY). AHEXY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.79, which compares to its industry's average of 19.49. Over the last 12 months, AHEXY's Forward P/E has been as high as 13.91 and as low as 8.83, with a median of 11.63.
We also note that AHEXY holds a PEG ratio of 1.37. 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. AHEXY's industry currently sports an average PEG of 1.85. Over the last 12 months, AHEXY's PEG has been as high as 1.71 and as low as 1.27, with a median of 1.39.
Finally, investors should note that AHEXY has a P/CF ratio of 12.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.43. Over the past 52 weeks, AHEXY's P/CF has been as high as 12.57 and as low as 7.10, with a median of 9.61.
If you're looking for another solid Outsourcing value stock, take a look at StarTek (SRT). SRT is a # 1 (Strong Buy) stock with a Value score of A.
Shares of StarTek currently holds a Forward P/E ratio of 8.26, and its PEG ratio is 0.55. In comparison, its industry sports average P/E and PEG ratios of 19.49 and 1.85.
Over the past year, SRT's P/E has been as high as 9.47, as low as 5.22, with a median of 6.55; its PEG ratio has been as high as 0.58, as low as 0.37, with a median of 1.39 during the same time period.
Furthermore, StarTek holds a P/B ratio of 1.03 and its industry's price-to-book ratio is 13.34. SRT's P/B has been as high as 1.04, as low as 0.42, with a median of 0.64 over the past 12 months.
These are just a handful of the figures considered in Adecco and StarTek's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AHEXY and SRT is an impressive value stock right now.
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Adecco SA (AHEXY) : Free Stock Analysis Report
StarTek, Inc. (SRT) : Free Stock Analysis Report
