Is Tech Data (TECD) a Great Value Stock 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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Tech Data (TECD). TECD is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 9.05, while its industry has an average P/E of 11.28. Over the past 52 weeks, TECD's Forward P/E has been as high as 10.07 and as low as 6.44, with a median of 7.63.
We also note that TECD holds a PEG ratio of 1.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TECD's PEG compares to its industry's average PEG of 1.34. Over the last 12 months, TECD's PEG has been as high as 1.11 and as low as 0.37, with a median of 0.95.
Investors should also recognize that TECD has a P/B ratio of 1.37. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.38. Over the past year, TECD's P/B has been as high as 1.41 and as low as 0.91, with a median of 1.10.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TECD has a P/S ratio of 0.1. This compares to its industry's average P/S of 0.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tech Data is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TECD feels like a great value stock at the moment.
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