Back to top

Image: Bigstock

Is Adecoagro (AGRO) a Great Value Stock Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Adecoagro (AGRO - Free Report) . AGRO 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 8.73 right now. For comparison, its industry sports an average P/E of 18.98. Over the last 12 months, AGRO's Forward P/E has been as high as 29.54 and as low as 8.17, with a median of 12.65.

Investors should also recognize that AGRO has a P/B ratio of 0.59. 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. AGRO's current P/B looks attractive when compared to its industry's average P/B of 0.88. Over the past year, AGRO's P/B has been as high as 1.01 and as low as 0.55, with a median of 0.72.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AGRO has a P/S ratio of 0.6. This compares to its industry's average P/S of 0.91.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Adecoagro is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AGRO feels like a great value stock at the moment.

In-Depth Zacks Research for the Tickers Above

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

Adecoagro S.A. (AGRO) - free report >>

Published in