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Are Investors Undervaluing Bae Systems (BAESY) Right Now?

Zacks Equity Research
·2 min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

Bae Systems (BAESY) is a stock many investors are watching right now. BAESY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 15.21. This compares to its industry's average Forward P/E of 19.43. BAESY's Forward P/E has been as high as 17.49 and as low as 12.42, with a median of 14.36, all within the past year.

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BAESY is also sporting a PEG ratio of 1.11. 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. BAESY's industry has an average PEG of 2.02 right now. BAESY's PEG has been as high as 2.15 and as low as 0.91, with a median of 1.22, all within the past year.

These are only a few of the key metrics included in Bae Systems's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BAESY looks like an impressive value stock at the moment.

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To read this article on Zacks.com click here.

Zacks Investment Research