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Should Value Investors Buy Albertsons Companies, Inc. (ACI) Stock?

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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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Albertsons Companies, Inc. (ACI - Free Report) . ACI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.02, which compares to its industry's average of 21.73. ACI's Forward P/E has been as high as 14.98 and as low as 5.35, with a median of 9.62, all within the past year.

We also note that ACI holds a PEG ratio of 1.17. 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. ACI's industry currently sports an average PEG of 1.79. Over the last 12 months, ACI's PEG has been as high as 1.25 and as low as 0.45, with a median of 0.82.

Finally, our model also underscores that ACI has a P/CF ratio of 7.77. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.90. ACI's P/CF has been as high as 8.31 and as low as 2.15, with a median of 3.62, all within the past year.

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


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