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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Ahold (ADRNY - Free Report) . ADRNY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 13.83, while its industry has an average P/E of 20.97. Over the past 52 weeks, ADRNY's Forward P/E has been as high as 13.88 and as low as 10.52, with a median of 11.87.
Investors will also notice that ADRNY has a PEG ratio of 2.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADRNY's industry has an average PEG of 3.13 right now. Over the last 12 months, ADRNY's PEG has been as high as 2.59 and as low as 1.80, with a median of 1.96.
Another notable valuation metric for ADRNY is its P/B ratio of 2.23. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 5.82. Over the past year, ADRNY's P/B has been as high as 2.23 and as low as 1.68, with a median of 1.94.
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. ADRNY has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.84.
Finally, investors will want to recognize that ADRNY has a P/CF ratio of 6.34. 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. ADRNY's P/CF compares to its industry's average P/CF of 14.69. Within the past 12 months, ADRNY's P/CF has been as high as 6.34 and as low as 4.55, with a median of 5.25.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ahold is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADRNY feels like a great value stock at the moment.
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Should Value Investors Buy Ahold (ADRNY) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Ahold (ADRNY - Free Report) . ADRNY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 13.83, while its industry has an average P/E of 20.97. Over the past 52 weeks, ADRNY's Forward P/E has been as high as 13.88 and as low as 10.52, with a median of 11.87.
Investors will also notice that ADRNY has a PEG ratio of 2.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADRNY's industry has an average PEG of 3.13 right now. Over the last 12 months, ADRNY's PEG has been as high as 2.59 and as low as 1.80, with a median of 1.96.
Another notable valuation metric for ADRNY is its P/B ratio of 2.23. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 5.82. Over the past year, ADRNY's P/B has been as high as 2.23 and as low as 1.68, with a median of 1.94.
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. ADRNY has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.84.
Finally, investors will want to recognize that ADRNY has a P/CF ratio of 6.34. 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. ADRNY's P/CF compares to its industry's average P/CF of 14.69. Within the past 12 months, ADRNY's P/CF has been as high as 6.34 and as low as 4.55, with a median of 5.25.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ahold is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADRNY feels like a great value stock at the moment.