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Are Investors Undervaluing Best Buy (BBY) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 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 company value investors might notice is Best Buy (BBY - Free Report) . BBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.13, which compares to its industry's average of 14.66. BBY's Forward P/E has been as high as 14.32 and as low as 9.41, with a median of 11.90, all within 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. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BBY has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.75.

Value investors will likely look at more than just these metrics, but the above data helps show that Best Buy is likely undervalued currently. And when considering the strength of its earnings outlook, BBY sticks out at as one of the market's strongest value stocks.


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