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Should Value Investors Buy Sysco (SYY) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 stock to keep an eye on is Sysco (SYY - Free Report) . SYY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 16.52. This compares to its industry's average Forward P/E of 16.74. Over the past 52 weeks, SYY's Forward P/E has been as high as 18.81 and as low as 14.22, with a median of 16.43.

We also note that SYY holds a PEG ratio of 1.44. 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 2.08. Over the last 12 months, SYY's PEG has been as high as 1.99 and as low as 1.14, with a median of 1.31.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYY has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.86.

Finally, investors will want to recognize that SYY has a P/CF ratio of 14.01. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.23. Over the past year, SYY's P/CF has been as high as 17.39 and as low as 11.63, with a median of 14.08.

These are just a handful of the figures considered in Sysco'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 SYY is an impressive value stock right now.


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