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Are Investors Undervaluing Flowers Foods (FLO) 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Flowers Foods (FLO - Free Report) . FLO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.11. This compares to its industry's average Forward P/E of 13.58. Over the last 12 months, FLO's Forward P/E has been as high as 18.20 and as low as 12.11, with a median of 15.02.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FLO has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.62.

Finally, investors will want to recognize that FLO has a P/CF ratio of 7.26. 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. FLO's current P/CF looks attractive when compared to its industry's average P/CF of 10.16. FLO's P/CF has been as high as 17.58 and as low as 7.26, with a median of 9.82, all within the past year.

These are only a few of the key metrics included in Flowers Foods's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, FLO looks like an impressive value stock at the moment.

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