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Are Investors Undervaluing Cracker Barrel Old Country Store (CBRL) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Cracker Barrel Old Country Store (CBRL - Free Report) . CBRL is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 19.15 right now. For comparison, its industry sports an average P/E of 25.47. Over the past year, CBRL's Forward P/E has been as high as 22.15 and as low as 10.90, with a median of 15.40.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CBRL has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.9.

Finally, our model also underscores that CBRL has a P/CF ratio of 7.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.98. CBRL's P/CF has been as high as 8.49 and as low as 4.59, with a median of 6.17, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Cracker Barrel Old Country Store is likely undervalued currently. And when considering the strength of its earnings outlook, CBRL sticks out as one of the market's strongest value stocks.


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