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Is Flowers Foods (FLO) Stock Undervalued 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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Flowers Foods (FLO - Free Report) . FLO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FLO has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.21.

Finally, investors should note that FLO has a P/CF ratio of 15.11. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.68. Within the past 12 months, FLO's P/CF has been as high as 18.08 and as low as 14.15, with a median of 15.93.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Flowers Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FLO feels like a great value stock at the moment.


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