Should Value Investors Buy Jabil (JBL) Stock?
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 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 Jabil (JBL). JBL is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.70, which compares to its industry's average of 10.92. JBL's Forward P/E has been as high as 13.65 and as low as 7.72, with a median of 9.60, all within the past year.
JBL is also sporting a PEG ratio of 0.81. 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. JBL's industry currently sports an average PEG of 1.19. Over the last 12 months, JBL's PEG has been as high as 1.14 and as low as 0.64, with a median of 0.80.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. JBL has a P/S ratio of 0.29. This compares to its industry's average P/S of 0.35.
Finally, investors will want to recognize that JBL has a P/CF ratio of 6.08. 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. JBL's P/CF compares to its industry's average P/CF of 7.60. Within the past 12 months, JBL's P/CF has been as high as 7.31 and as low as 5.45, with a median of 6.38.
These are just a handful of the figures considered in Jabil'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 JBL is an impressive value stock right now.
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