Are Investors Undervaluing Celestica (CLS) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Celestica (CLS) is a stock many investors are watching right now. CLS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.61 right now. For comparison, its industry sports an average P/E of 12.49. Over the past year, CLS's Forward P/E has been as high as 16.31 and as low as 3.61, with a median of 10.13.
We also note that CLS holds a PEG ratio of 0.34. 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. CLS's PEG compares to its industry's average PEG of 0.99. CLS's PEG has been as high as 7.66 and as low as 0.34, with a median of 4.32, all within the past year.
Investors should also recognize that CLS has a P/B ratio of 0.73. Investors use the P/B ratio to look at a stock's market value versus 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 1.79. Over the past year, CLS's P/B has been as high as 0.87 and as low as 0.27, with a median of 0.68.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CLS has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.27.
These are just a handful of the figures considered in Celestica'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 CLS is an impressive value stock right now.
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