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Should Value Investors Buy TreeHouse Foods (THS) Stock?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 stock to keep an eye on is TreeHouse Foods (THS - Free Report) . THS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for THS is its P/B ratio of 1.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.27. THS's P/B has been as high as 1.56 and as low as 0.93, with a median of 1.22, over the past year.
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. THS has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.24.
Finally, we should also recognize that THS has a P/CF ratio of 17.34. 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 17.78. THS's P/CF has been as high as 18.05 and as low as 7.33, with a median of 11.21, all within the past year.
If you're looking for another solid Food - Miscellaneous value stock, take a look at US Foods (USFD - Free Report) . USFD is a # 2 (Buy) stock with a Value score of A.
US Foods is trading at a forward earnings multiple of 11.13 at the moment, with a PEG ratio of 0.56. This compares to its industry's average P/E of 17.82 and average PEG ratio of 2.06.
Over the last 12 months, USFD's P/E has been as high as 22.96, as low as 10.17, with a median of 13.32, and its PEG ratio has been as high as 1.15, as low as 0.51, with a median of 0.70.
US Foods also has a P/B ratio of 1.73 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 2.35, as low as 1.56, with a median of 1.98.
Value investors will likely look at more than just these metrics, but the above data helps show that TreeHouse Foods and US Foods are likely undervalued currently. And when considering the strength of its earnings outlook, THS and USFD sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy TreeHouse Foods (THS) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 stock to keep an eye on is TreeHouse Foods (THS - Free Report) . THS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for THS is its P/B ratio of 1.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.27. THS's P/B has been as high as 1.56 and as low as 0.93, with a median of 1.22, over the past year.
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. THS has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.24.
Finally, we should also recognize that THS has a P/CF ratio of 17.34. 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 17.78. THS's P/CF has been as high as 18.05 and as low as 7.33, with a median of 11.21, all within the past year.
If you're looking for another solid Food - Miscellaneous value stock, take a look at US Foods (USFD - Free Report) . USFD is a # 2 (Buy) stock with a Value score of A.
US Foods is trading at a forward earnings multiple of 11.13 at the moment, with a PEG ratio of 0.56. This compares to its industry's average P/E of 17.82 and average PEG ratio of 2.06.
Over the last 12 months, USFD's P/E has been as high as 22.96, as low as 10.17, with a median of 13.32, and its PEG ratio has been as high as 1.15, as low as 0.51, with a median of 0.70.
US Foods also has a P/B ratio of 1.73 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 2.35, as low as 1.56, with a median of 1.98.
Value investors will likely look at more than just these metrics, but the above data helps show that TreeHouse Foods and US Foods are likely undervalued currently. And when considering the strength of its earnings outlook, THS and USFD sticks out as one of the market's strongest value stocks.