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Is Imperial Tobacco Group PLC (IMBBY) Stock Undervalued 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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Imperial Tobacco Group PLC (IMBBY - Free Report) . IMBBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.87. This compares to its industry's average Forward P/E of 13.24. Over the past year, IMBBY's Forward P/E has been as high as 10.65 and as low as 7.70, with a median of 9.54.

Investors will also notice that IMBBY has a PEG ratio of 1.50. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IMBBY's industry has an average PEG of 1.68 right now. Over the past 52 weeks, IMBBY's PEG has been as high as 3.67 and as low as 1.31, with a median of 3.31.

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


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