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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Performance Food Group (PFGC - Free Report) is a stock many investors are watching right now. PFGC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.38 right now. For comparison, its industry sports an average P/E of 21.09. PFGC's Forward P/E has been as high as 23.88 and as low as 4.55, with a median of 21.31, all within the past year.
PFGC is also sporting a PEG ratio of 1.44. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PFGC's PEG compares to its industry's average PEG of 2.55. Over the past 52 weeks, PFGC's PEG has been as high as 2.19 and as low as 1.44, with a median of 1.86.
Investors should also recognize that PFGC has a P/B ratio of 1.58. The P/B ratio pits a stock's market value against 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 3.16. PFGC's P/B has been as high as 4.59 and as low as 0.97, with a median of 3.51, over the past year.
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. PFGC has a P/S ratio of 0.11. This compares to its industry's average P/S of 0.2.
Finally, investors will want to recognize that PFGC has a P/CF ratio of 5.71. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.96. Within the past 12 months, PFGC's P/CF has been as high as 16.60 and as low as 3.51, with a median of 13.74.
Value investors will likely look at more than just these metrics, but the above data helps show that Performance Food Group is likely undervalued currently. And when considering the strength of its earnings outlook, PFGC sticks out at as one of the market's strongest value stocks.