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Are Investors Undervaluing Sony (SNE) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Sony (SNE). SNE is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.59. This compares to its industry's average Forward P/E of 16.79. Over the past year, SNE's Forward P/E has been as high as 16.05 and as low as 6.87, with a median of 13.94.

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Investors should also note that SNE holds a PEG ratio of 2.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SNE's industry currently sports an average PEG of 2.03. Over the last 12 months, SNE's PEG has been as high as 2.46 and as low as 0.91, with a median of 1.88.

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


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