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Is El Pollo Loco (LOCO) 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.

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 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 company to watch right now is El Pollo Loco (LOCO - Free Report) . LOCO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.55, which compares to its industry's average of 25.28. Over the past year, LOCO's Forward P/E has been as high as 16.11 and as low as 11.59, with a median of 13.99.

Finally, investors will want to recognize that LOCO has a P/CF ratio of 8.59. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. LOCO's P/CF compares to its industry's average P/CF of 22.02. Over the past 52 weeks, LOCO's P/CF has been as high as 10.11 and as low as 6.06, with a median of 7.90.

These are just a handful of the figures considered in El Pollo Loco'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 LOCO is an impressive value stock right now.


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