Price To Earnings Valuation in Focus For Stanley Black & Decker, Inc. (NYSE:SWK)

Honing in on the valuation of Stanley Black & Decker, Inc. (NYSE:SWK), 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. Stanley Black & Decker, Inc. currently has a PEG ratio of 4.66.Investors are constantly hunting for bargains when picking stocks. There may be times when a particular stock might be flying under the radar, but is usually only a matter of time before someone catches on. Investors might be widening their stock focus to find these undervalued names. This may include small caps, foreign stocks, or stocks that just haven’t become household names. Expanding the scope of interest may help the investor discover areas of future opportunity. Although there are plenty of investors who will stick to the solid, historically steady stocks, there are plenty more that are searching for that next big winner that will give the portfolio a big bump.

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.

Stanley Black & Decker, Inc. (NYSE:SWK) currently has an average analyst recommendation of 2.30 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 $162.64 on the shares.

In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently 9.49% away from its 50-day simple moving average and 12.01% away from the 200 day average. Based on a recent trade, the shares are 0.93% away from the 52-week high and 41.03% 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 Stanley Black & Decker, Inc.(NYSE:SWK) currently stands at 63.85.

Performance
Stanley Black & Decker, Inc. has posted trailing 12 months earnings of $5.51 per share. The company has seen a change of -35.30% earnings per share this year. Analysts are predicting 6.99% for the company next year. The firm is yielding 3.10% return on assets and 8.90% return on equity.

Even extremely solid stocks can sometimes face setbacks. There is no shortage of news regarding publically traded companies, and investors often have the tricky job of deciding what information is worth taking a closer look at. Making trading decisions based on one piece of data may not be the optimal course of action. When there is negative information about a company, investors may be quick to sell without looking deeper into the numbers. On the flip side, investors may be super quick to buy on good news without fully researching the stock.