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FLEX vs. HOCPY: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Flex (FLEX - Free Report) or Hoya Corp. (HOCPY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Flex has a Zacks Rank of #2 (Buy), while Hoya Corp. has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FLEX has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

FLEX currently has a forward P/E ratio of 13.49, while HOCPY has a forward P/E of 34.46. We also note that FLEX has a PEG ratio of 1.86. 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. HOCPY currently has a PEG ratio of 3.01.

Another notable valuation metric for FLEX is its P/B ratio of 2.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HOCPY has a P/B of 7.01.

Based on these metrics and many more, FLEX holds a Value grade of A, while HOCPY has a Value grade of F.

FLEX has seen stronger estimate revision activity and sports more attractive valuation metrics than HOCPY, so it seems like value investors will conclude that FLEX is the superior option right now.


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