Should Value Investors Buy Adecoagro (AGRO) Stock?

AGRO

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Adecoagro (AGRO - Free Report) . AGRO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13 right now. For comparison, its industry sports an average P/E of 15.27. Over the last 12 months, AGRO's Forward P/E has been as high as 1,474.48 and as low as -13,057.05, with a median of 22.85.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AGRO has a P/S ratio of 1.28. This compares to its industry's average P/S of 1.94.

Finally, we should also recognize that AGRO has a P/CF ratio of 5.60. 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. AGRO's current P/CF looks attractive when compared to its industry's average P/CF of 7.37. Over the past year, AGRO's P/CF has been as high as 5.97 and as low as 2.58, with a median of 4.84.

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

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