Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

2022-05-29 20:31:52 By : Ms. Sunny Cheung

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

New York-based Arrow Electronics Inc. is one of the world’s largest distributors of electronic components and enterprise computing products. Arrow provides one of the broadest product ranges in the electronic components and enterprise computing solutions distribution industries. Along with these, the company provides a wide range of value-added services to help customers reduce their marketing time, lower the total cost of ownership, introduce innovative products through demand creation opportunities and enhance their overall competitiveness.

ARW is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of B. Shares are currently trading at a forward P/E of 6X for the current fiscal year compared to the Electronics - Parts Distribution industry's P/E of 8.4X. Additionally, ARW has a PEG Ratio of 1.9 and a Price/Cash Flow ratio of 6.4X. Value investors should also note ARW's Price/Sales ratio of 0.2X.

A company's earnings performance is important for value investors as well. For fiscal 2022, three analysts revised their earnings estimate higher in the last 60 days for ARW, while the Zacks Consensus Estimate has increased $2.20 to $20.68 per share. ARW also holds an average earnings surprise of 17.7%.

ARW should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report   Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report   To read this article on Zacks.com click here.

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