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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Jabil Circuit, Inc. (JBL - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Jabil Circuit has a trailing twelve months PE ratio of 15.57, as you can see in the chart below:
This level actually compares pretty favorably with the market at large as well, as the PE for the S&P 500 stands at about 20.15. If we focus on the PE trend, Jabil Circuit’s current PE level is significantly below its highs over the past five years (which stands at 55.10). This suggests that the stock is undervalued compared to its historical levels.
Further, the stock’s PE is almost in-line with the Zacks classified Electronics Manufacturing Services industry’s trailing twelve months PE ratio, which stands at 15.45. This indicates that the stock is reasonably valued right now, compared to its peers.
We should also point out that Jabil Circuit has a forward PE ratio (price relative to this year’s earnings) of just 14.11, so it is fair to say that a slightly more value-oriented path may be ahead for Jabil Circuit stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Jabil Circuit has a P/S ratio of about 0.25. This is way lower than the S&P 500 average, which comes in at 2.82 right now. Also, as we can see in the chart below, this is around the midpoint for this stock in particular over the past five years, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Jabil Circuit currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Jabil Circuit a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.81, which is far better than the industry average of 8.05. Clearly, Jabil Circuit is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Jabil Circuit might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives JBL a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. While the current quarter has seen one estimate go lower in the past sixty days compared to none higher, the full year estimate has seen one upward revision and no downward revisions in the same time period.
This has had a meaningful, impact on the consensus estimate though, as the current quarter consensus estimate has fallen by 14.3% in the past seven days, while the full year estimate has inched lower by 1.2%.
You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite this bearish trend, we have a Zacks Rank #1 (Strong Buy) for the stock, which indicates expectations of outperformance from the company in the near term.
Bottom Line
Jabil Circuit is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a good industry rank (Top 22% out of more than 250 industries) and a top Zacks Rank, the company deserves attention right now.
In fact, over the past one year, the Zacks categorized Electronics Manufacturing Services industry has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick. However, it might be prudent to wait for analyst sentiment to turn around first.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Is Jabil Circuit a Good Value Pick at the Moment?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Jabil Circuit, Inc. (JBL - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Jabil Circuit has a trailing twelve months PE ratio of 15.57, as you can see in the chart below:
This level actually compares pretty favorably with the market at large as well, as the PE for the S&P 500 stands at about 20.15. If we focus on the PE trend, Jabil Circuit’s current PE level is significantly below its highs over the past five years (which stands at 55.10). This suggests that the stock is undervalued compared to its historical levels.
Further, the stock’s PE is almost in-line with the Zacks classified Electronics Manufacturing Services industry’s trailing twelve months PE ratio, which stands at 15.45. This indicates that the stock is reasonably valued right now, compared to its peers.
We should also point out that Jabil Circuit has a forward PE ratio (price relative to this year’s earnings) of just 14.11, so it is fair to say that a slightly more value-oriented path may be ahead for Jabil Circuit stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Jabil Circuit has a P/S ratio of about 0.25. This is way lower than the S&P 500 average, which comes in at 2.82 right now. Also, as we can see in the chart below, this is around the midpoint for this stock in particular over the past five years, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Jabil Circuit currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Jabil Circuit a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.81, which is far better than the industry average of 8.05. Clearly, Jabil Circuit is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Jabil Circuit might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives JBL a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. While the current quarter has seen one estimate go lower in the past sixty days compared to none higher, the full year estimate has seen one upward revision and no downward revisions in the same time period.
This has had a meaningful, impact on the consensus estimate though, as the current quarter consensus estimate has fallen by 14.3% in the past seven days, while the full year estimate has inched lower by 1.2%.
You can see the consensus estimate trend and recent price action for the stock in the chart below:
Jabil Circuit, Inc. Price and Consensus
Jabil Circuit, Inc. Price and Consensus | Jabil Circuit, Inc. Quote
Despite this bearish trend, we have a Zacks Rank #1 (Strong Buy) for the stock, which indicates expectations of outperformance from the company in the near term.
Bottom Line
Jabil Circuit is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Boasting a good industry rank (Top 22% out of more than 250 industries) and a top Zacks Rank, the company deserves attention right now.
In fact, over the past one year, the Zacks categorized Electronics Manufacturing Services industry has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick. However, it might be prudent to wait for analyst sentiment to turn around first.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>