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Should Value Investors Buy Nomad Foods Limited (NOMD) Stock?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Nomad Foods Limited (NOMD - Free Report) . NOMD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.11, which compares to its industry's average of 17.38. NOMD's Forward P/E has been as high as 13.45 and as low as 7.03, with a median of 9.85, all within the past year.
We should also highlight that NOMD has a P/B ratio of 1.14. Investors use the P/B ratio to look at a stock's market value versus 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 2.34. NOMD's P/B has been as high as 1.69 and as low as 0.85, with a median of 1.21, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NOMD has a P/S ratio of 0.96. This compares to its industry's average P/S of 0.97.
Finally, investors will want to recognize that NOMD has a P/CF ratio of 8.68. 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 19.54. Within the past 12 months, NOMD's P/CF has been as high as 15.90 and as low as 6.48, with a median of 10.08.
These are only a few of the key metrics included in Nomad Foods Limited's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, NOMD looks like an impressive value stock at the moment.