Is Celestica (CLS) Stock Undervalued Right Now?

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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.

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Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.

Celestica (CLS) is a stock many investors are watching right now. CLS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.78. This compares to its industry’s average Forward P/E of 11.02. Over the past 52 weeks, CLS’s Forward P/E has been as high as 9.54 and as low as 6.49, with a median of 7.95.

Investors will also notice that CLS has a PEG ratio of 0.77. 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. CLS’s PEG compares to its industry’s average PEG of 0.97. CLS’s PEG has been as high as 2.11 and as low as 0.29, with a median of 0.75, all within the past year.

Another notable valuation metric for CLS is its P/B ratio of 0.98. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. This company’s current P/B looks solid when compared to its industry’s average P/B of 2.70. Over the past 12 months, CLS’s P/B has been as high as 1 and as low as 0.63, with a median of 0.77.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. CLS has a P/S ratio of 0.26. This compares to its industry’s average P/S of 0.38.

Finally, investors will want to recognize that CLS has a P/CF ratio of 6.63. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CLS’s P/CF compares to its industry’s average P/CF of 8.44. Over the past year, CLS’s P/CF has been as high as 6.79 and as low as 4.30, with a median of 5.62.

Value investors will likely look at more than just these metrics, but the above data helps show that Celestica, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, CLS sticks out at as one of the market’s strongest value stocks.

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