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Should Value Investors Buy Dell Technologies (DELL) 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 - Free Report) is a stock many investors are watching right now. DELL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.88, while its industry has an average P/E of 32.63. DELL's Forward P/E has been as high as 11.95 and as low as 5.53, with a median of 8.33, all within the past year.

Investors will also notice that DELL has a PEG ratio of 0.91. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DELL's PEG compares to its industry's average PEG of 2.38. Within the past year, DELL's PEG has been as high as 1 and as low as 0.46, with a median of 0.69.

If you're looking for another solid Computers - IT Services value stock, take a look at Science Applications International (SAIC - Free Report) . SAIC is a # 2 (Buy) stock with a Value score of A.

Additionally, Science Applications International has a P/B ratio of 3.34 while its industry's price-to-book ratio sits at 20.83. For SAIC, this valuation metric has been as high as 3.83, as low as 3.01, with a median of 3.38 over the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Dell Technologies and Science Applications International are likely undervalued currently. And when considering the strength of its earnings outlook, DELL and SAIC sticks out as one of the market's strongest value stocks.


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