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Should Value Investors Buy Bae Systems (BAESY) Stock?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Bae Systems (BAESY - Free Report) . BAESY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.94, while its industry has an average P/E of 26.78. BAESY's Forward P/E has been as high as 17.71 and as low as 12.42, with a median of 15, all within the past year.

Investors should also note that BAESY holds a PEG ratio of 1.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BAESY's PEG compares to its industry's average PEG of 2.13. Over the past 52 weeks, BAESY's PEG has been as high as 1.51 and as low as 0.91, with a median of 1.13.

Investors should also recognize 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. BAESY's current P/B looks attractive when compared to its industry's average P/B of 7.18. BAESY's P/B has been as high as 2.88 and as low as 1.82, with a median of 2.54, over the past year.

These are only a few of the key metrics included in Bae Systems'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, BAESY looks like an impressive value stock at the moment.


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