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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is Sanmina (SANM). SANM is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.12, which compares to its industry's average of 26.07. Over the last 12 months, SANM's Forward P/E has been as high as 18.20 and as low as 10.26, with a median of 12.95.
We also note that SANM holds a PEG ratio of 1.26. 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. SANM's industry has an average PEG of 1.40 right now. Over the last 12 months, SANM's PEG has been as high as 1.55 and as low as 0.77, with a median of 1.06.
Finally, we should also recognize that SANM has a P/CF ratio of 16.93. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 26.36. Within the past 12 months, SANM's P/CF has been as high as 17.73 and as low as 10.27, with a median of 12.92.
These are just a handful of the figures considered in Sanmina'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 SANM is an impressive value stock right now.
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Sanmina Corporation (SANM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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