Yahoo Finance Should Value Investors Buy Dell Technologies (DELL) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Dell Technologies (DELL) is a stock many investors are watching right now. DELL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.92. This compares to its industry's average Forward P/E of 32.88. DELL's Forward P/E has been as high as 21.53 and as low as 8.26, with a median of 10.75, all within the past year.
We also note that DELL holds a PEG ratio of 1.36. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DELL's PEG compares to its industry's average PEG of 2.40. Over the last 12 months, DELL's PEG has been as high as 2.27 and as low as 0.69, with a median of 0.90.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DELL has a P/S ratio of 1.03. This compares to its industry's average P/S of 1.81.
Finally, investors will want to recognize that DELL has a P/CF ratio of 14.14. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 52.59. Over the past 52 weeks, DELL's P/CF has been as high as 18.91 and as low as 6.66, with a median of 9.50.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Dell Technologies is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DELL feels like a great value stock at the moment.
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Dell Technologies Inc. (DELL) : Free Stock Analysis Report
