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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
B&G Foods (BGS - Free Report) is a stock many investors are watching right now. BGS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.95 right now. For comparison, its industry sports an average P/E of 18.14. Over the past year, BGS's Forward P/E has been as high as 14.17 and as low as 7.03, with a median of 9.98.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BGS has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.25.
Finally, our model also underscores that BGS has a P/CF ratio of 10.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BGS's P/CF compares to its industry's average P/CF of 15.18. BGS's P/CF has been as high as 10.47 and as low as 4.05, with a median of 6.37, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that B&G Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BGS feels like a great value stock at the moment.