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Should Value Investors Buy The Kroger Co. (KR) Stock?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 The Kroger Co. (KR - Free Report) . KR 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 10.49, which compares to its industry's average of 20.57. KR's Forward P/E has been as high as 16.61 and as low as 10.15, with a median of 11.78, all within the past year.
Investors should also note that KR holds a PEG ratio of 1.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KR's PEG compares to its industry's average PEG of 3.65. 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.
Another valuation metric that we should highlight is KR's P/B ratio of 3.29. 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. KR's current P/B looks attractive when compared to its industry's average P/B of 3.91. Within the past 52 weeks, KR's P/B has been as high as 4.81 and as low as 3.08, with a median of 3.53.
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. KR has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.26.
Finally, we should also recognize that KR has a P/CF ratio of 5.56. 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 16.25. Within the past 12 months, KR's P/CF has been as high as 9.01 and as low as 5.14, with a median of 5.92.
Another great Retail - Supermarkets stock you could consider is Tesco (TSCDY - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Tesco is trading at a forward earnings multiple of 12.99 at the moment, with a PEG ratio of 2.73. This compares to its industry's average P/E of 20.57 and average PEG ratio of 3.65.
TSCDY's price-to-earnings ratio has been as high as 13.05 and as low as 9.09, with a median of 11.52, while its PEG ratio has been as high as 4.15 and as low as 0.32, with a median of 3.34, all within the past year.
Tesco sports a P/B ratio of 1.37 as well; this compares to its industry's price-to-book ratio of 3.91. In the past 52 weeks, TSCDY's P/B has been as high as 1.38, as low as 0.99, with a median of 1.20.
These are only a few of the key metrics included in The Kroger Co. and Tesco strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, KR and TSCDY look like an impressive value stock at the moment.
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Should Value Investors Buy The Kroger Co. (KR) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 The Kroger Co. (KR - Free Report) . KR 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 10.49, which compares to its industry's average of 20.57. KR's Forward P/E has been as high as 16.61 and as low as 10.15, with a median of 11.78, all within the past year.
Investors should also note that KR holds a PEG ratio of 1.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KR's PEG compares to its industry's average PEG of 3.65. 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.
Another valuation metric that we should highlight is KR's P/B ratio of 3.29. 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. KR's current P/B looks attractive when compared to its industry's average P/B of 3.91. Within the past 52 weeks, KR's P/B has been as high as 4.81 and as low as 3.08, with a median of 3.53.
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. KR has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.26.
Finally, we should also recognize that KR has a P/CF ratio of 5.56. 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 16.25. Within the past 12 months, KR's P/CF has been as high as 9.01 and as low as 5.14, with a median of 5.92.
Another great Retail - Supermarkets stock you could consider is Tesco (TSCDY - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Tesco is trading at a forward earnings multiple of 12.99 at the moment, with a PEG ratio of 2.73. This compares to its industry's average P/E of 20.57 and average PEG ratio of 3.65.
TSCDY's price-to-earnings ratio has been as high as 13.05 and as low as 9.09, with a median of 11.52, while its PEG ratio has been as high as 4.15 and as low as 0.32, with a median of 3.34, all within the past year.
Tesco sports a P/B ratio of 1.37 as well; this compares to its industry's price-to-book ratio of 3.91. In the past 52 weeks, TSCDY's P/B has been as high as 1.38, as low as 0.99, with a median of 1.20.
These are only a few of the key metrics included in The Kroger Co. and Tesco strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, KR and TSCDY look like an impressive value stock at the moment.