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Should Value Investors Buy Sysco (SYY) Stock?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 Sysco (SYY - Free Report) . SYY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors will also notice that SYY has a PEG ratio of 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SYY's PEG compares to its industry's average PEG of 1.77. Over the past 52 weeks, SYY's PEG has been as high as 2.01 and as low as 1.14, with a median of 1.32.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SYY has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.75.

Finally, investors should note that SYY has a P/CF ratio of 12.46. 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 14.09. Over the past 52 weeks, SYY's P/CF has been as high as 18.79 and as low as 11.90, with a median of 15.54.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Sysco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SYY feels like a great value stock at the moment.


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