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SNX vs. WIT: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Business - Software Services sector have probably already heard of Synnex (SNX) and Wipro Limited (WIT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Synnex has a Zacks Rank of #2 (Buy), while Wipro Limited has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SNX has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SNX currently has a forward P/E ratio of 14.76, while WIT has a forward P/E of 27.30. We also note that SNX has a PEG ratio of 1.42. 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 3.03.

Another notable valuation metric for SNX is its P/B ratio of 2.82. 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 5.89.

Based on these metrics and many more, SNX holds a Value grade of A, while WIT has a Value grade of C.

SNX stands above WIT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SNX is the superior value 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