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Are Investors Undervaluing STMicroelectronics (STM) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is STMicroelectronics (STM - Free Report) . STM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 16.60, while its industry has an average P/E of 16.97. Over the last 12 months, STM's Forward P/E has been as high as 18.09 and as low as 8.69, with a median of 14.13.
Another notable valuation metric for STM is its P/B ratio of 2.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.73. STM's P/B has been as high as 4.08 and as low as 1.68, with a median of 2.53, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STM has a P/S ratio of 1.74. This compares to its industry's average P/S of 2.77.
Finally, investors should note that STM has a P/CF ratio of 8.40. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.11. STM's P/CF has been as high as 14.53 and as low as 5.45, with a median of 8.19, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that STMicroelectronics is likely undervalued currently. And when considering the strength of its earnings outlook, STM sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing STMicroelectronics (STM) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is STMicroelectronics (STM - Free Report) . STM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 16.60, while its industry has an average P/E of 16.97. Over the last 12 months, STM's Forward P/E has been as high as 18.09 and as low as 8.69, with a median of 14.13.
Another notable valuation metric for STM is its P/B ratio of 2.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.73. STM's P/B has been as high as 4.08 and as low as 1.68, with a median of 2.53, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STM has a P/S ratio of 1.74. This compares to its industry's average P/S of 2.77.
Finally, investors should note that STM has a P/CF ratio of 8.40. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.11. STM's P/CF has been as high as 14.53 and as low as 5.45, with a median of 8.19, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that STMicroelectronics is likely undervalued currently. And when considering the strength of its earnings outlook, STM sticks out at as one of the market's strongest value stocks.