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 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.
Sanmina (SANM) is a stock many investors are watching right now. SANM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.52, while its industry has an average P/E of 15.41. SANM's Forward P/E has been as high as 14.08 and as low as 9.58, with a median of 11.21, all within the past year.
SANM is also sporting a PEG ratio of 0.86. 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. SANM's PEG compares to its industry's average PEG of 1.20. SANM's PEG has been as high as 1.55 and as low as 0.71, with a median of 1.07, all within the past year.
These are only a few of the key metrics included in Sanmina's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SANM looks like an impressive value stock at the moment.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
