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Are Investors Undervaluing Smart & Final Stores (SFS) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Smart & Final Stores . SFS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.41 right now. For comparison, its industry sports an average P/E of 15.05. Over the last 12 months, SFS's Forward P/E has been as high as 21.05 and as low as 9.85, with a median of 12.64.

Another valuation metric that we should highlight is SFS's P/B ratio of 1. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.63. Over the past 12 months, SFS's P/B has been as high as 1.76 and as low as 0.83, with a median of 1.05.

Finally, our model also underscores that SFS has a P/CF ratio of 2.88. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 8.83. Over the past year, SFS's P/CF has been as high as 4.95 and as low as 2.31, with a median of 2.97.

These are just a handful of the figures considered in Smart & Final Stores'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 SFS is an impressive value stock right now.

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