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Are Investors Undervaluing Bae Systems (BAESY) Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Bae Systems (BAESY - Free Report) . BAESY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 16.04 right now. For comparison, its industry sports an average P/E of 28.08. Over the last 12 months, BAESY's Forward P/E has been as high as 17.71 and as low as 12.42, with a median of 14.87.

We also note that BAESY holds a PEG ratio of 1.15. 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. BAESY's PEG compares to its industry's average PEG of 2.24. Over the last 12 months, BAESY's PEG has been as high as 1.51 and as low as 0.91, with a median of 1.13.

We should also highlight that BAESY has a P/B ratio of 2.78. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 7.45. Within the past 52 weeks, BAESY's P/B has been as high as 2.88 and as low as 1.82, with a median of 2.44.

These are just a handful of the figures considered in Bae Systems'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 BAESY is an impressive value stock right now.


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