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Should Value Investors Buy These Consumer Staples Stocks?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Albertsons Companies (ACI - Free Report) . ACI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 14.28. This compares to its industry's average Forward P/E of 22.81. Over the past year, ACI's Forward P/E has been as high as 14.98 and as low as 5.35, with a median of 10.01.
We also note that ACI holds a PEG ratio of 1.19. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ACI's industry has an average PEG of 1.98 right now. 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 0.84.
Finally, we should also recognize that ACI has a P/CF ratio of 8.58. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.38. Within the past 12 months, ACI's P/CF has been as high as 8.81 and as low as 2.15, with a median of 3.84.
If you're looking for another solid Consumer Products - Staples value stock, take a look at Franchise Group . FRG is a # 2 (Buy) stock with a Value score of A.
Franchise Group is currently trading with a Forward P/E ratio of 12.53 while its PEG ratio sits at 0.84. Both of the company's metrics compare favorably to its industry's average P/E of 22.81 and average PEG ratio of 1.98.
Over the last 12 months, FRG's P/E has been as high as 13.76, as low as 8.77, with a median of 10.16, and its PEG ratio has been as high as 0.92, as low as 0.58, with a median of 0.68.
Franchise Group also has a P/B ratio of 3.18 compared to its industry's price-to-book ratio of 4.76. Over the past year, its P/B ratio has been as high as 4.22, as low as 2.23, with a median of 3.05.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Albertsons Companies and Franchise Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACI and FRG feels like a great value stock at the moment.
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Should Value Investors Buy These Consumer Staples Stocks?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Albertsons Companies (ACI - Free Report) . ACI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 14.28. This compares to its industry's average Forward P/E of 22.81. Over the past year, ACI's Forward P/E has been as high as 14.98 and as low as 5.35, with a median of 10.01.
We also note that ACI holds a PEG ratio of 1.19. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ACI's industry has an average PEG of 1.98 right now. 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 0.84.
Finally, we should also recognize that ACI has a P/CF ratio of 8.58. 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 stock's P/CF looks attractive against its industry's average P/CF of 14.38. Within the past 12 months, ACI's P/CF has been as high as 8.81 and as low as 2.15, with a median of 3.84.
If you're looking for another solid Consumer Products - Staples value stock, take a look at Franchise Group . FRG is a # 2 (Buy) stock with a Value score of A.
Franchise Group is currently trading with a Forward P/E ratio of 12.53 while its PEG ratio sits at 0.84. Both of the company's metrics compare favorably to its industry's average P/E of 22.81 and average PEG ratio of 1.98.
Over the last 12 months, FRG's P/E has been as high as 13.76, as low as 8.77, with a median of 10.16, and its PEG ratio has been as high as 0.92, as low as 0.58, with a median of 0.68.
Franchise Group also has a P/B ratio of 3.18 compared to its industry's price-to-book ratio of 4.76. Over the past year, its P/B ratio has been as high as 4.22, as low as 2.23, with a median of 3.05.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Albertsons Companies and Franchise Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACI and FRG feels like a great value stock at the moment.