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Should Value Investors Buy B&G Foods (BGS) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 value investors might notice is B&G Foods (BGS - Free Report) . BGS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.89. This compares to its industry's average Forward P/E of 18.22. BGS's Forward P/E has been as high as 14.17 and as low as 7.03, with a median of 9.96, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BGS has a P/S ratio of 0.94. This compares to its industry's average P/S of 1.14.

Finally, investors should note that BGS has a P/CF ratio of 9.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.18. BGS's P/CF has been as high as 10.13 and as low as 4.05, with a median of 5.85, all within the past year.

These are only a few of the key metrics included in B&G Foods'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, BGS looks like an impressive value stock at the moment.


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