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THS or LNDC: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Food - Miscellaneous sector might want to consider either TreeHouse Foods (THS - Free Report) or Landec . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, TreeHouse Foods has a Zacks Rank of #2 (Buy), while Landec has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that THS is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

THS currently has a forward P/E ratio of 13.29, while LNDC has a forward P/E of 179. We also note that THS has a PEG ratio of 2.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LNDC currently has a PEG ratio of 17.90.

Another notable valuation metric for THS is its P/B ratio of 1.24. 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, LNDC has a P/B of 1.42.

These are just a few of the metrics contributing to THS's Value grade of B and LNDC's Value grade of D.

THS has seen stronger estimate revision activity and sports more attractive valuation metrics than LNDC, so it seems like value investors will conclude that THS is the superior option right now.


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