Should Value Investors Buy Arrow Electronics (ARW) Stock?

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.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.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.One company to watch right now is Arrow Electronics (ARW). ARW is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.44, while its industry has an average P/E of 14.76. Over the past year, ARW's Forward P/E has been as high as 11.05 and as low as 8.04, with a median of 9.71. Investors should also note that ARW holds a PEG ratio of 0.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ARW's PEG compares to its industry's average PEG of 0.49. Within the past year, ARW's PEG has been as high as 0.55 and as low as 0.40, with a median of 0.49. Investors should also recognize that ARW has a P/B ratio of 0.98. The P/B ratio is used to compare a stock's market value with 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 2.13. Within the past 52 weeks, ARW's P/B has been as high as 1.22 and as low as 0.78, with a median of 1.02.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. ARW has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.48.Finally, investors will want to recognize that ARW has a P/CF ratio of 9.63. 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. This stock's P/CF looks attractive against its industry's average P/CF of 18.54. Over the past 52 weeks, ARW's P/CF has been as high as 11.55 and as low as 8.13, with a median of 10.03.Investors could also keep in mind Avnet (AVT), another Electronics - Parts Distribution stock with a Zacks Rank of #2 (Buy) and Value grade of A.Shares of Avnet are currently trading at a forward earnings multiple of 10.47 and a PEG ratio of 0.36 compared to its industry's P/E and PEG ratios of 14.76 and 0.49, respectively.Over the past year, AVT's P/E has been as high as 16.75, as low as 8.05, with a median of 10.50; its PEG ratio has been as high as 1.89, as low as 0.35, with a median of 0.81 during the same time period.Avnet sports a P/B ratio of 0.89 as well; this compares to its industry's price-to-book ratio of 2.13. In the past 52 weeks, AVT's P/B has been as high as 1.00, as low as 0.71, with a median of 0.91.Value investors will likely look at more than just these metrics, but the above data helps show that Arrow Electronics and Avnet are likely undervalued currently. And when considering the strength of its earnings outlook, ARW and AVT sticks out as one of the market's strongest value stocks.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks