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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.
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 company value investors might notice is Kroger (KR - Free Report) . KR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.09 right now. For comparison, its industry sports an average P/E of 21.32. KR's Forward P/E has been as high as 13.38 and as low as 9.24, with a median of 11.13, all within the past year.
Investors should also note that KR holds a PEG ratio of 1.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KR's industry currently sports an average PEG of 4.01. Within the past year, KR's PEG has been as high as 1.99 and as low as 1.34, with a median of 1.67.
Investors should also recognize that KR has a P/B ratio of 2.56. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.56. Within the past 52 weeks, KR's P/B has been as high as 3.12 and as low as 1.95, with a median of 2.42.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KR has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.26.
Finally, we should also recognize that KR has a P/CF ratio of 4.93. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. KR's P/CF compares to its industry's average P/CF of 11.51. Over the past 52 weeks, KR's P/CF has been as high as 4.97 and as low as 3.42, with a median of 4.10.
Value investors will likely look at more than just these metrics, but the above data helps show that Kroger is likely undervalued currently. And when considering the strength of its earnings outlook, KR sticks out at as one of the market's strongest value stocks.
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Is Kroger (KR) Stock Undervalued 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.
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 company value investors might notice is Kroger (KR - Free Report) . KR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.09 right now. For comparison, its industry sports an average P/E of 21.32. KR's Forward P/E has been as high as 13.38 and as low as 9.24, with a median of 11.13, all within the past year.
Investors should also note that KR holds a PEG ratio of 1.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KR's industry currently sports an average PEG of 4.01. Within the past year, KR's PEG has been as high as 1.99 and as low as 1.34, with a median of 1.67.
Investors should also recognize that KR has a P/B ratio of 2.56. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.56. Within the past 52 weeks, KR's P/B has been as high as 3.12 and as low as 1.95, with a median of 2.42.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KR has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.26.
Finally, we should also recognize that KR has a P/CF ratio of 4.93. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. KR's P/CF compares to its industry's average P/CF of 11.51. Over the past 52 weeks, KR's P/CF has been as high as 4.97 and as low as 3.42, with a median of 4.10.
Value investors will likely look at more than just these metrics, but the above data helps show that Kroger is likely undervalued currently. And when considering the strength of its earnings outlook, KR sticks out at as one of the market's strongest value stocks.