Valuation in Focus: AVX Corporation (NYSE:AVX)

Honing in on the valuation of AVX Corporation (NYSE:AVX), we can take a look at several ratios. One of the quickest ways to determine the projected value of a stock is the price to earnings growth, or PEG ratio. This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth. Simply put, a stock with a PEG ratio of 1 would be considered fairly valued.

A stock with a ratio of under 1.0 would be undervalued and a stock with a PEG over 1.0 would be considered over valued. AVX Corporation currently has a PEG ratio of 1.53.Investors may be combing through all the latest earnings reports and trying to make sense of all the numbers. With lots of information readily available, investors may be searching for that next batch of stocks to add to the portfolio. Finding high quality stocks may be at the top of the investor’s checklist. Once high quality stocks are spotted, the investor may be then looking for bargains among those stocks. Many investors will look for stocks that have displayed consistent earnings growth over an extended period of time. When a company drastically over performs for a quarter, investors may be quick to investigate. The same things may be done if a company severely underperforms compared to projections. 

Most importantly investors want to know where the stock is headed from here. In order to get a sense of Wall Street sentiment, we can look to equity research analyst estimates. On a one to five ratings scale where 1.0 indicates a Strong Buy, 2.0 indicates a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Stong Sell. AVX Corporation (NYSE:AVX) currently has an average analyst recommendation of 3.00 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $18.00 on the shares.

In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently 3.75% away from its 50-day simple moving average and 4.12% away from the 200 day average. Based on a recent trade, the shares are -15.64% away from the 52-week high and 27.51% from the 52-week low. The RSI (Relative Strength Index), which shows price strength by comparing upward and downward close to close movements.

An RSI approaching 70 is typically deemed to be nearing overbought status and could be ripe for a pullback. Alternatively an RSI nearing 30 indicates that the stock could be getting oversold and might be considered undervalued. The RSI for AVX Corporation(NYSE:AVX) currently stands at 54.95.

Stock Performance
AVX Corporation has posted trailing 12 months earnings of $1.38 per share. The company has seen a change of 5.10% earnings per share this year. Analysts are predicting -5.06% for the company next year. The firm is yielding 8.60% return on assets and 10.30% return on equity.

Investors may be analyzing the portfolio as we continue to move closer to the end of the year. Studying first half results may assist to identify trades that panned out, and those that didn’t. Keeping tabs on pervious trade outcomes may be a good way to accurately see what actually happened. It may be necessary to dig a little deeper to try and figure out why certain trades worked, and why others did not. Many investors may feel like they have missed the boat, and they may be wondering if stocks will see increased momentum closing out the year. Attaining comprehensive knowledge of the markets may take years to truly figure out. Combining technical analysis and tracking fundamentals may help the investor see the complete picture and develop confidence for trading into the future. Being able to sift through the endless sea of information may take some perseverance and extreme focus.