Back to top

Image: Bigstock

Are Investors Undervaluing The J. M. Smucker Co. (SJM) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 The J. M. Smucker Co. (SJM - Free Report) . SJM 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 11.05. This compares to its industry's average Forward P/E of 16.54. SJM's Forward P/E has been as high as 16.36 and as low as 10.79, with a median of 12.68, all within the past year.

Investors will also notice that SJM has a PEG ratio of 1.69. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SJM's industry currently sports an average PEG of 1.92. Within the past year, SJM's PEG has been as high as 6.76 and as low as 1.65, with a median of 2.01.

Another notable valuation metric for SJM is its P/B ratio of 1.59. 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. SJM's current P/B looks attractive when compared to its industry's average P/B of 2.18. Over the past year, SJM's P/B has been as high as 2.32 and as low as 1.54, with a median of 1.86.

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

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

The J. M. Smucker Company (SJM) - free report >>

Published in