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Is Celestica (CLS) a Great Value Stock Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Celestica (CLS). CLS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.19. This compares to its industry's average Forward P/E of 16.22. Over the past 52 weeks, CLS's Forward P/E has been as high as 12.38 and as low as 3.61, with a median of 8.77.

Investors should also recognize that CLS has a P/B ratio of 0.75. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.79. CLS's P/B has been as high as 0.85 and as low as 0.27, with a median of 0.68, 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. 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 0.18. This compares to its industry's average P/S of 0.38.

Finally, investors should note that CLS has a P/CF ratio of 5.67. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.35. Over the past 52 weeks, CLS's P/CF has been as high as 9.09 and as low as 1.77, with a median of 6.29.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Celestica is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CLS feels like a great value stock at the moment.


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