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Should Value Investors Buy B&G Foods (BGS) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

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.

B&G Foods (BGS - Free Report) is a stock many investors are watching right now. BGS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 11.40 right now. For comparison, its industry sports an average P/E of 19.16. Over the past year, BGS's Forward P/E has been as high as 15.07 and as low as 7.03, with a median of 12.

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. BGS has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.43.

Finally, investors should note that BGS has a P/CF ratio of 8.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BGS's current P/CF looks attractive when compared to its industry's average P/CF of 15.18. Over the past year, BGS's P/CF has been as high as 10.53 and as low as 4.96, with a median of 8.62.

These are just a handful of the figures considered in B&G 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 BGS is an impressive value stock right now.


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