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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.

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.

Ingredion (INGR - Free Report) is a stock many investors are watching right now. INGR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.06. This compares to its industry's average Forward P/E of 16.41. Over the past 52 weeks, INGR's Forward P/E has been as high as 14.47 and as low as 11.54, with a median of 13.43.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. INGR has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.35.

Finally, investors should note that INGR has a P/CF ratio of 16.79. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.03. Over the past year, INGR's P/CF has been as high as 27.60 and as low as 8.96, with a median of 17.11.

United Natural Foods (UNFI - Free Report) may be another strong Food - Miscellaneous stock to add to your shortlist. UNFI is a # 1 (Strong Buy) stock with a Value grade of A.

United Natural Foods sports a P/B ratio of 1.85 as well; this compares to its industry's price-to-book ratio of 2. In the past 52 weeks, UNFI's P/B has been as high as 1.94, as low as 0.73, with a median of 1.50.

These are just a handful of the figures considered in Ingredion and United Natural Foods's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that INGR and UNFI is an impressive value stock right now.


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