Are Investors Undervaluing Adecco (AHEXY) 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.
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.
Adecco (AHEXY) is a stock many investors are watching right now. AHEXY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.65 right now. For comparison, its industry sports an average P/E of 18.91. Over the past year, AHEXY's Forward P/E has been as high as 13.91 and as low as 6.97, with a median of 9.03.
We also note that AHEXY holds a PEG ratio of 1.66. 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. AHEXY's industry has an average PEG of 1.88 right now. AHEXY's PEG has been as high as 1.71 and as low as 1.63, with a median of 1.66, all within the past year.
Finally, investors should note that AHEXY has a P/CF ratio of 10.07. 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 15.56. Over the past 52 weeks, AHEXY's P/CF has been as high as 10.82 and as low as 5.50, with a median of 7.08.
Investors could also keep in mind Brink's (BCO), an Outsourcing stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Furthermore, Brink's holds a P/B ratio of 5.23 and its industry's price-to-book ratio is 14.32. BCO's P/B has been as high as 13.31, as low as 4.38, with a median of 7.55 over the past 12 months.
These are only a few of the key metrics included in Adecco and Brink's strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AHEXY and BCO look like an impressive value stock at the moment.
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