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Is Seagate (STX) a Great Value Stock Right Now?

Zacks Equity Research
·2 mins read

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Seagate (STX). STX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.26, which compares to its industry's average of 18.05. Over the last 12 months, STX's Forward P/E has been as high as 12.66 and as low as 8.26, with a median of 10.38.

Finally, we should also recognize that STX has a P/CF ratio of 5.59. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.34. Over the past year, STX's P/CF has been as high as 7.79 and as low as 4.84, with a median of 6.43.

These are just a handful of the figures considered in Seagate'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 STX is an impressive value stock right now.


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