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Are Investors Undervaluing Coca-Cola FEMSA (KOF) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Coca-Cola FEMSA (KOF - Free Report) . KOF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.75, which compares to its industry's average of 23.39. Over the last 12 months, KOF's Forward P/E has been as high as 17.45 and as low as 10.60, with a median of 15.13.

KOF is also sporting a PEG ratio of 1.44. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KOF's industry currently sports an average PEG of 3.71. Within the past year, KOF's PEG has been as high as 1.84 and as low as 0.87, with a median of 1.48.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KOF has a P/S ratio of 1.03. This compares to its industry's average P/S of 3.02.

Finally, we should also recognize that KOF has a P/CF ratio of 14.19. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.21. KOF's P/CF has been as high as 15.84 and as low as 6.27, with a median of 7.87, all within the past year.

These are just a handful of the figures considered in Coca-Cola FEMSA'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 KOF is an impressive value stock right now.


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