Back to top

Are Investors Undervaluing United Natural Foods (UNFI) Right Now?

Read MoreHide Full Article

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.

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 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.

United Natural Foods (UNFI - Free Report) is a stock many investors are watching right now. UNFI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.04 right now. For comparison, its industry sports an average P/E of 16.92. Over the last 12 months, UNFI's Forward P/E has been as high as 18.97 and as low as 9.04, with a median of 14.16.

We also note that UNFI holds a PEG ratio of 1.09. 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. UNFI's industry currently sports an average PEG of 1.74. UNFI's PEG has been as high as 3.76 and as low as 1.09, with a median of 2.55, all within the past year.

Another valuation metric that we should highlight is UNFI's P/B ratio of 0.89. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.71. Within the past 52 weeks, UNFI's P/B has been as high as 1.56 and as low as 0.89, with a median of 1.24.

Finally, investors will want to recognize that UNFI has a P/CF ratio of 6.06. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.76. Over the past year, UNFI's P/CF has been as high as 12.23 and as low as 6.06, with a median of 8.89.

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

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

United Natural Foods, Inc. (UNFI) - free report >>

More from Zacks Tale of the Tape

You May Like