Are Investors Undervaluing Vontier (VNT) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is Vontier (VNT). VNT is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 12.63, which compares to its industry's average of 19.84. Over the past year, VNT's Forward P/E has been as high as 12.96 and as low as 8.65, with a median of 11.59.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VNT has a P/S ratio of 1.42. This compares to its industry's average P/S of 1.77.

Finally, investors will want to recognize that VNT has a P/CF ratio of 12.23. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 36.42. VNT's P/CF has been as high as 12.36 and as low as 8.36, with a median of 10.65, all within the past year.

These are just a handful of the figures considered in Vontier's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that VNT is an impressive value stock right now.

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

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