We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Reasons Value Stock Investors Will Love United Natural Foods (UNFI)
Read MoreHide Full Article
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on United Natural Foods, Inc. (UNFI - Free Report) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for UNFI’s status as a solid value stock below:
Forward PE for United Natural Foods
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, UNFI has a forward PE of just 18.82, which means that investors are paying $18.82 for each dollar in expected United Natural Foods earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 21.04 in comparison.
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for UNFI comes in at 9.42, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 11.69, so United Natural Foods has its peers beat in this regard too.
UNFI Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow UNFI stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for United Natural Foods now.
Over the past 30 days, 10 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 9 estimates has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago UNFI was expected to post earnings of $2.37 per share for the full year though today it looks to have EPS of $2.51 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have UNFI as a stock with a Value Score of ‘B’ and a Zacks Rank #1 (Strong Buy). So if you are a value investor, definitely keep UNFI on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Reasons Value Stock Investors Will Love United Natural Foods (UNFI)
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on United Natural Foods, Inc. (UNFI - Free Report) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for UNFI’s status as a solid value stock below:
Forward PE for United Natural Foods
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, UNFI has a forward PE of just 18.82, which means that investors are paying $18.82 for each dollar in expected United Natural Foods earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 21.04 in comparison.
UTD NATURAL FDS PE Ratio (TTM)
UTD NATURAL FDS PE Ratio (TTM) | UTD NATURAL FDS Quote
Price/Cash Flow for United Natural Foods Stock
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for UNFI comes in at 9.42, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 11.69, so United Natural Foods has its peers beat in this regard too.
UNFI Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow UNFI stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for United Natural Foods now.
Over the past 30 days, 10 earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that 9 estimates has move upwards with no downward revision for the next year time frame too. These revisions have helped to boost the consensus estimate as 30 days ago UNFI was expected to post earnings of $2.37 per share for the full year though today it looks to have EPS of $2.51 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have UNFI as a stock with a Value Score of ‘B’ and a Zacks Rank #1 (Strong Buy). So if you are a value investor, definitely keep UNFI on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>