We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing Tyson Foods (TSN) Right Now?
Read MoreHide Full Article
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Tyson Foods (TSN - Free Report) is a stock many investors are watching right now. TSN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.87 right now. For comparison, its industry sports an average P/E of 15.95. Over the past year, TSN's Forward P/E has been as high as 13.72 and as low as 8.43, with a median of 11.12.
Investors will also notice that TSN has a PEG ratio of 1.45. 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. TSN's industry currently sports an average PEG of 2.13. Over the past 52 weeks, TSN's PEG has been as high as 1.45 and as low as 0.77, with a median of 0.92.
Another notable valuation metric for TSN is its P/B ratio of 2.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. TSN's current P/B looks attractive when compared to its industry's average P/B of 3.03. Over the past 12 months, TSN's P/B has been as high as 2.41 and as low as 1.45, with a median of 1.87.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TSN has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.78.
Finally, investors should note that TSN has a P/CF ratio of 9.74. 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. TSN's P/CF compares to its industry's average P/CF of 14.02. Over the past 52 weeks, TSN's P/CF has been as high as 10.55 and as low as 4.70, with a median of 8.37.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing Tyson Foods (TSN) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Tyson Foods (TSN - Free Report) is a stock many investors are watching right now. TSN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.87 right now. For comparison, its industry sports an average P/E of 15.95. Over the past year, TSN's Forward P/E has been as high as 13.72 and as low as 8.43, with a median of 11.12.
Investors will also notice that TSN has a PEG ratio of 1.45. 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. TSN's industry currently sports an average PEG of 2.13. Over the past 52 weeks, TSN's PEG has been as high as 1.45 and as low as 0.77, with a median of 0.92.
Another notable valuation metric for TSN is its P/B ratio of 2.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. TSN's current P/B looks attractive when compared to its industry's average P/B of 3.03. Over the past 12 months, TSN's P/B has been as high as 2.41 and as low as 1.45, with a median of 1.87.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TSN has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.78.
Finally, investors should note that TSN has a P/CF ratio of 9.74. 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. TSN's P/CF compares to its industry's average P/CF of 14.02. Over the past 52 weeks, TSN's P/CF has been as high as 10.55 and as low as 4.70, with a median of 8.37.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.