Are Investors Undervaluing Seagate (STX) 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.
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 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.
Seagate (STX) is a stock many investors are watching right now. STX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.63, which compares to its industry's average of 18.17. Over the past 52 weeks, STX's Forward P/E has been as high as 12.66 and as low as 8.75, with a median of 10.38.
Finally, we should also recognize that STX has a P/CF ratio of 6.41. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.34. Within the past 12 months, STX's P/CF has been as high as 7.79 and as low as 4.84, with a median of 6.43.
Value investors will likely look at more than just these metrics, but the above data helps show that Seagate is likely undervalued currently. And when considering the strength of its earnings outlook, STX sticks out at as one of the market's strongest value stocks.
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Seagate Technology PLC (STX) : Free Stock Analysis Report
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