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Should Value Investors Buy Adecoagro (AGRO) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Adecoagro (AGRO - Free Report) . AGRO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 15.11, while its industry has an average P/E of 15.42. Over the past 52 weeks, 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 use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AGRO has a P/S ratio of 1.12. This compares to its industry's average P/S of 1.8.

Finally, investors will want to recognize that AGRO has a P/CF ratio of 4.93. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.37. Over the past 52 weeks, AGRO's P/CF has been as high as 5.97 and as low as 2.53, with a median of 4.79.

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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