We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are These Retail-Wholesale Stocks Undervalued Right Now?
Read MoreHide Full Article
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is The Kroger Co. (KR - Free Report) . KR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.57. This compares to its industry's average Forward P/E of 20.79. Over the past year, KR's Forward P/E has been as high as 16.61 and as low as 11.73, with a median of 13.08.
We also note that KR holds a PEG ratio of 1.58. 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. KR's industry currently sports an average PEG of 2.52. KR's PEG has been as high as 2.14 and as low as 1.32, with a median of 1.57, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KR has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.33.
Finally, investors will want to recognize that KR has a P/CF ratio of 8.40. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 19.54. Within the past 12 months, KR's P/CF has been as high as 8.61 and as low as 4.59, with a median of 6.66.
Investors could also keep in mind Tesco (TSCDY - Free Report) , an Retail - Supermarkets stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Tesco is currently trading with a Forward P/E ratio of 12.06 while its PEG ratio sits at 0.37. Both of the company's metrics compare favorably to its industry's average P/E of 20.79 and average PEG ratio of 2.52.
Over the past year, TSCDY's P/E has been as high as 13.74, as low as 10.98, with a median of 12.41; its PEG ratio has been as high as 2.05, as low as 0.34, with a median of 1.57 during the same time period.
Furthermore, Tesco holds a P/B ratio of 1.51 and its industry's price-to-book ratio is 3.90. TSCDY's P/B has been as high as 1.73, as low as 1.44, with a median of 1.57 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Kroger Co. and Tesco are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KR and TSCDY feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are These Retail-Wholesale Stocks Undervalued 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is The Kroger Co. (KR - Free Report) . KR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.57. This compares to its industry's average Forward P/E of 20.79. Over the past year, KR's Forward P/E has been as high as 16.61 and as low as 11.73, with a median of 13.08.
We also note that KR holds a PEG ratio of 1.58. 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. KR's industry currently sports an average PEG of 2.52. KR's PEG has been as high as 2.14 and as low as 1.32, with a median of 1.57, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KR has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.33.
Finally, investors will want to recognize that KR has a P/CF ratio of 8.40. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 19.54. Within the past 12 months, KR's P/CF has been as high as 8.61 and as low as 4.59, with a median of 6.66.
Investors could also keep in mind Tesco (TSCDY - Free Report) , an Retail - Supermarkets stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Tesco is currently trading with a Forward P/E ratio of 12.06 while its PEG ratio sits at 0.37. Both of the company's metrics compare favorably to its industry's average P/E of 20.79 and average PEG ratio of 2.52.
Over the past year, TSCDY's P/E has been as high as 13.74, as low as 10.98, with a median of 12.41; its PEG ratio has been as high as 2.05, as low as 0.34, with a median of 1.57 during the same time period.
Furthermore, Tesco holds a P/B ratio of 1.51 and its industry's price-to-book ratio is 3.90. TSCDY's P/B has been as high as 1.73, as low as 1.44, with a median of 1.57 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Kroger Co. and Tesco are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KR and TSCDY feels like a great value stock at the moment.