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Are Investors Undervaluing Industrias Bachoco (IBA) Right Now?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Industrias Bachoco (IBA - Free Report) . IBA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.38, while its industry has an average P/E of 13.81. Over the last 12 months, IBA's Forward P/E has been as high as 10.48 and as low as 7.68, with a median of 8.49.

We should also highlight that IBA has a P/B ratio of 0.97. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.68. IBA's P/B has been as high as 1.01 and as low as 0.78, with a median of 0.89, over the past year.

Finally, investors will want to recognize that IBA has a P/CF ratio of 5.90. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.45. Within the past 12 months, IBA's P/CF has been as high as 6.89 and as low as 4.79, with a median of 5.78.

Value investors will likely look at more than just these metrics, but the above data helps show that Industrias Bachoco is likely undervalued currently. And when considering the strength of its earnings outlook, IBA sticks out at as one of the market's strongest value stocks.


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