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Is John B. Sanfilippo & Son (JBSS) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

John B. Sanfilippo & Son (JBSS - Free Report) is a stock many investors are watching right now. JBSS is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.

Value investors also use the P/S ratio. The P/S ratio 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. JBSS has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.88.

Finally, investors should note that JBSS has a P/CF ratio of 8.21. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. JBSS's current P/CF looks attractive when compared to its industry's average P/CF of 9.67. Over the past 52 weeks, JBSS's P/CF has been as high as 13.64 and as low as 7.93, with a median of 10.44.

These figures are just a handful of the metrics value investors tend to look at, but they help show that John B. Sanfilippo & Son is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, JBSS feels like a great value stock at the moment.


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