Are Investors Undervaluing Avnet (AVT) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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 stock to keep an eye on is Avnet (AVT). AVT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
AVT is also sporting a PEG ratio of 0.54. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AVT's PEG compares to its industry's average PEG of 0.70. AVT's PEG has been as high as 3.63 and as low as 0.24, with a median of 0.55, all within the past year.
Another valuation metric that we should highlight is AVT's P/B ratio of 0.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.17. Over the past 12 months, AVT's P/B has been as high as 1.04 and as low as 0.80, with a median of 0.92.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AVT has a P/S ratio of 0.16. This compares to its industry's average P/S of 0.24.
Finally, our model also underscores that AVT has a P/CF ratio of 4.68. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.48. Over the past 52 weeks, AVT's P/CF has been as high as 5.17 and as low as 3.72, with a median of 4.36.
These are only a few of the key metrics included in Avnet's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AVT looks like an impressive value stock at the moment.
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Avnet, Inc. (AVT) : Free Stock Analysis Report
