Is Sanmina (SANM) Stock Undervalued 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 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 Sanmina (SANM). SANM 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 17.12, while its industry has an average P/E of 20.76. Over the past 52 weeks, SANM's Forward P/E has been as high as 18.20 and as low as 10.26, with a median of 12.95.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SANM has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.01.

Finally, our model also underscores that SANM has a P/CF ratio of 16.93. 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 22.85. Over the past 52 weeks, SANM's P/CF has been as high as 17.73 and as low as 10.27, with a median of 12.92.

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

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This article originally published on Zacks Investment Research (zacks.com).

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