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Is Arcos Dorados (ARCO) a Great Value Stock Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Arcos Dorados (ARCO - Free Report) . ARCO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.68 right now. For comparison, its industry sports an average P/E of 23.47. Over the last 12 months, ARCO's Forward P/E has been as high as 15.57 and as low as 10.09, with a median of 12.24.
We also note that ARCO holds a PEG ratio of 1. 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. ARCO's PEG compares to its industry's average PEG of 1.66. Over the past 52 weeks, ARCO's PEG has been as high as 1.62 and as low as 0.89, with a median of 1.16.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARCO has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.95.
Finally, our model also underscores that ARCO has a P/CF ratio of 8.06. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ARCO's P/CF compares to its industry's average P/CF of 17.78. Over the past year, ARCO's P/CF has been as high as 8.52 and as low as 5.42, with a median of 6.91.
If you're looking for another solid Retail - Restaurants value stock, take a look at Chuy's (CHUY - Free Report) . CHUY is a # 2 (Buy) stock with a Value score of A.
Chuy's sports a P/B ratio of 2.33 as well; this compares to its industry's price-to-book ratio of -27.89. In the past 52 weeks, CHUY's P/B has been as high as 3.09, as low as 2.22, with a median of 2.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arcos Dorados and Chuy's are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCO and CHUY feels like a great value stock at the moment.
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Is Arcos Dorados (ARCO) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Arcos Dorados (ARCO - Free Report) . ARCO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.68 right now. For comparison, its industry sports an average P/E of 23.47. Over the last 12 months, ARCO's Forward P/E has been as high as 15.57 and as low as 10.09, with a median of 12.24.
We also note that ARCO holds a PEG ratio of 1. 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. ARCO's PEG compares to its industry's average PEG of 1.66. Over the past 52 weeks, ARCO's PEG has been as high as 1.62 and as low as 0.89, with a median of 1.16.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARCO has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.95.
Finally, our model also underscores that ARCO has a P/CF ratio of 8.06. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ARCO's P/CF compares to its industry's average P/CF of 17.78. Over the past year, ARCO's P/CF has been as high as 8.52 and as low as 5.42, with a median of 6.91.
If you're looking for another solid Retail - Restaurants value stock, take a look at Chuy's (CHUY - Free Report) . CHUY is a # 2 (Buy) stock with a Value score of A.
Chuy's sports a P/B ratio of 2.33 as well; this compares to its industry's price-to-book ratio of -27.89. In the past 52 weeks, CHUY's P/B has been as high as 3.09, as low as 2.22, with a median of 2.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arcos Dorados and Chuy's are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCO and CHUY feels like a great value stock at the moment.