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Are Investors Undervaluing Dell Technologies (DELL) Right Now?

Zacks Equity Research

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Dell Technologies (DELL). DELL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors will also notice that DELL has a PEG ratio of 0.81. 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. DELL's industry currently sports an average PEG of 2.35. Over the last 12 months, DELL's PEG has been as high as 0.83 and as low as 0.38, with a median of 0.61.

Another notable valuation metric for DELL is its P/B ratio of 13.83. 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. This company's current P/B looks solid when compared to its industry's average P/B of 16.95. Over the past year, DELL's P/B has been as high as 14.11 and as low as 6.68, with a median of 10.57.

Value investors will likely look at more than just these metrics, but the above data helps show that Dell Technologies is likely undervalued currently. And when considering the strength of its earnings outlook, DELL sticks out at as one of the market's strongest value stocks.


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