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IMKTA vs. CBD: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Ingles (IMKTA - Free Report) or CBD . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Ingles has a Zacks Rank of #1 (Strong Buy), while CBD has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IMKTA has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

IMKTA currently has a forward P/E ratio of 8.92, while CBD has a forward P/E of 22.01. We also note that IMKTA has a PEG ratio of 0.98. 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. CBD currently has a PEG ratio of 1.09.

Another notable valuation metric for IMKTA is its P/B ratio of 0.97. 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. By comparison, CBD has a P/B of 2.04.

These are just a few of the metrics contributing to IMKTA's Value grade of A and CBD's Value grade of C.

IMKTA sticks out from CBD in both our Zacks Rank and Style Scores models, so value investors will likely feel that IMKTA is the better option right now.


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