Yahoo Finance Are Investors Undervaluing Arrow Electronics (ARW) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Arrow Electronics (ARW). ARW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.26, which compares to its industry's average of 7.50. Over the past year, ARW's Forward P/E has been as high as 4,441.88 and as low as 4.69, with a median of 6.12.
Another valuation metric that we should highlight is ARW's P/B ratio of 1.32. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.38. Over the past 12 months, ARW's P/B has been as high as 1.76 and as low as 1.06, with a median of 1.34.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARW has a P/S ratio of 0.19. This compares to its industry's average P/S of 0.26.
Finally, our model also underscores that ARW has a P/CF ratio of 4.41. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ARW's P/CF compares to its industry's average P/CF of 5.45. Within the past 12 months, ARW's P/CF has been as high as 7.11 and as low as 3.54, with a median of 4.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arrow Electronics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARW feels like a great value stock at the moment.
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Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report
