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Are Investors Undervaluing Ahold NV (ADRNY) Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Ahold NV (ADRNY - Free Report) . ADRNY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 12.76, while its industry has an average P/E of 22.35. Over the past year, ADRNY's Forward P/E has been as high as 14.69 and as low as 10.77, with a median of 12.91.

Finally, we should also recognize that ADRNY has a P/CF ratio of 5.04. 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. ADRNY's P/CF compares to its industry's average P/CF of 11.57. Over the past year, ADRNY's P/CF has been as high as 6.14 and as low as 4.39, with a median of 5.53.

Value investors will likely look at more than just these metrics, but the above data helps show that Ahold NV is likely undervalued currently. And when considering the strength of its earnings outlook, ADRNY sticks out at as one of the market's strongest value stocks.


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