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Should Value Investors Buy Ingles (IMKTA) Stock?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Ingles (IMKTA - Free Report) . IMKTA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.72. This compares to its industry's average Forward P/E of 22.30. Over the past year, IMKTA's Forward P/E has been as high as 11.05 and as low as 7.22, with a median of 9.15.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IMKTA has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.23.

Finally, investors will want to recognize that IMKTA has a P/CF ratio of 4.23. 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. IMKTA's P/CF compares to its industry's average P/CF of 11.67. IMKTA's P/CF has been as high as 5.08 and as low as 2.74, with a median of 4.02, all within the past year.

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


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