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Are Investors Undervaluing These Consumer Staples Stocks Right Now?
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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Pilgrim's Pride (PPC - Free Report) . PPC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 9.18, while its industry has an average P/E of 13.41. Over the past 52 weeks, PPC's Forward P/E has been as high as 13.71 and as low as 9, with a median of 11.47.
PPC is also sporting a PEG ratio of 1.01. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PPC's PEG compares to its industry's average PEG of 1.72. Over the past 52 weeks, PPC's PEG has been as high as 1.01 and as low as 0.28, with a median of 0.39.
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. PPC has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.72.
If you're looking for another solid Food - Meat Products value stock, take a look at Sanderson Farms . SAFM is a # 1 (Strong Buy) stock with a Value score of A.
Sanderson Farms is trading at a forward earnings multiple of 7.97 at the moment, with a PEG ratio of 0.42. This compares to its industry's average P/E of 13.41 and average PEG ratio of 1.72.
SAFM's Forward P/E has been as high as 37.27 and as low as 7.38, with a median of 13.83. During the same time period, its PEG ratio has been as high as 0.77, as low as 0.32, with a median of 0.38.
Sanderson Farms also has a P/B ratio of 1.97 compared to its industry's price-to-book ratio of 2.30. Over the past year, its P/B ratio has been as high as 2.87, as low as 1.96, with a median of 2.50.
Value investors will likely look at more than just these metrics, but the above data helps show that Pilgrim's Pride and Sanderson Farms are likely undervalued currently. And when considering the strength of its earnings outlook, PPC and SAFM sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing These Consumer Staples Stocks Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is Pilgrim's Pride (PPC - Free Report) . PPC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 9.18, while its industry has an average P/E of 13.41. Over the past 52 weeks, PPC's Forward P/E has been as high as 13.71 and as low as 9, with a median of 11.47.
PPC is also sporting a PEG ratio of 1.01. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PPC's PEG compares to its industry's average PEG of 1.72. Over the past 52 weeks, PPC's PEG has been as high as 1.01 and as low as 0.28, with a median of 0.39.
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. PPC has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.72.
If you're looking for another solid Food - Meat Products value stock, take a look at Sanderson Farms . SAFM is a # 1 (Strong Buy) stock with a Value score of A.
Sanderson Farms is trading at a forward earnings multiple of 7.97 at the moment, with a PEG ratio of 0.42. This compares to its industry's average P/E of 13.41 and average PEG ratio of 1.72.
SAFM's Forward P/E has been as high as 37.27 and as low as 7.38, with a median of 13.83. During the same time period, its PEG ratio has been as high as 0.77, as low as 0.32, with a median of 0.38.
Sanderson Farms also has a P/B ratio of 1.97 compared to its industry's price-to-book ratio of 2.30. Over the past year, its P/B ratio has been as high as 2.87, as low as 1.96, with a median of 2.50.
Value investors will likely look at more than just these metrics, but the above data helps show that Pilgrim's Pride and Sanderson Farms are likely undervalued currently. And when considering the strength of its earnings outlook, PPC and SAFM sticks out as one of the market's strongest value stocks.