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Are Investors Undervaluing The Kroger Co. (KR) 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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on 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 is trading with a P/E ratio of 10.80, which compares to its industry's average of 19.90. KR's Forward P/E has been as high as 16.61 and as low as 10.15, with a median of 12.12, all within the past year.
We also note that KR holds a PEG ratio of 1.77. 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 has an average PEG of 3.54 right now. KR's PEG has been as high as 1.98 and as low as 0.87, with a median of 1.25, all within the past year.
We should also highlight that KR has a P/B ratio of 3.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.66. KR's P/B has been as high as 4.81 and as low as 3.13, with a median of 3.56, over the past year.
Finally, our model also underscores that KR has a P/CF ratio of 5.57. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.61. KR's P/CF has been as high as 9.01 and as low as 5.14, with a median of 6.15, all within the past year.
Tesco (TSCDY - Free Report) may be another strong Retail - Supermarkets stock to add to your shortlist. TSCDY is a # 2 (Buy) stock with a Value grade of A.
Tesco is currently trading with a Forward P/E ratio of 12.85 while its PEG ratio sits at 2.93. Both of the company's metrics compare favorably to its industry's average P/E of 19.90 and average PEG ratio of 3.54.
Over the last 12 months, TSCDY's P/E has been as high as 13.30, as low as 9.09, with a median of 11.52, and its PEG ratio has been as high as 4.15, as low as 0.32, with a median of 3.34.
Additionally, Tesco has a P/B ratio of 1.36 while its industry's price-to-book ratio sits at 3.66. For TSCDY, this valuation metric has been as high as 1.73, as low as 0.99, with a median of 1.20 over the past year.
These are just a handful of the figures considered in The Kroger Co. and Tesco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KR and TSCDY is an impressive value stock right now.
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Are Investors Undervaluing The Kroger Co. (KR) 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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on 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 is trading with a P/E ratio of 10.80, which compares to its industry's average of 19.90. KR's Forward P/E has been as high as 16.61 and as low as 10.15, with a median of 12.12, all within the past year.
We also note that KR holds a PEG ratio of 1.77. 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 has an average PEG of 3.54 right now. KR's PEG has been as high as 1.98 and as low as 0.87, with a median of 1.25, all within the past year.
We should also highlight that KR has a P/B ratio of 3.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.66. KR's P/B has been as high as 4.81 and as low as 3.13, with a median of 3.56, over the past year.
Finally, our model also underscores that KR has a P/CF ratio of 5.57. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.61. KR's P/CF has been as high as 9.01 and as low as 5.14, with a median of 6.15, all within the past year.
Tesco (TSCDY - Free Report) may be another strong Retail - Supermarkets stock to add to your shortlist. TSCDY is a # 2 (Buy) stock with a Value grade of A.
Tesco is currently trading with a Forward P/E ratio of 12.85 while its PEG ratio sits at 2.93. Both of the company's metrics compare favorably to its industry's average P/E of 19.90 and average PEG ratio of 3.54.
Over the last 12 months, TSCDY's P/E has been as high as 13.30, as low as 9.09, with a median of 11.52, and its PEG ratio has been as high as 4.15, as low as 0.32, with a median of 3.34.
Additionally, Tesco has a P/B ratio of 1.36 while its industry's price-to-book ratio sits at 3.66. For TSCDY, this valuation metric has been as high as 1.73, as low as 0.99, with a median of 1.20 over the past year.
These are just a handful of the figures considered in The Kroger Co. and Tesco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that KR and TSCDY is an impressive value stock right now.