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SNX vs. WIT: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Business - Software Services sector might want to consider either Synnex (SNX) or Wipro Limited (WIT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Synnex and Wipro Limited are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SNX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SNX currently has a forward P/E ratio of 13.13, while WIT has a forward P/E of 28.07. We also note that SNX has a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WIT currently has a PEG ratio of 3.12.

Another notable valuation metric for SNX is its P/B ratio of 2.53. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WIT has a P/B of 6.06.

These are just a few of the metrics contributing to SNX's Value grade of A and WIT's Value grade of C.

SNX has seen stronger estimate revision activity and sports more attractive valuation metrics than WIT, so it seems like value investors will conclude that SNX is the superior option right now.


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SYNNEX Corporation (SNX) : Free Stock Analysis Report
 
Wipro Limited (WIT) : Free Stock Analysis Report
 
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Zacks Investment Research