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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Conagra Brands (CAG). CAG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 12.36, which compares to its industry's average of 17.33. Over the past year, CAG's Forward P/E has been as high as 15.78 and as low as 12.07, with a median of 13.70.
Investors will also notice that CAG has a PEG ratio of 1.95. 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. CAG's PEG compares to its industry's average PEG of 2.01. Over the last 12 months, CAG's PEG has been as high as 2.46 and as low as 1.74, with a median of 2.04.
We should also highlight that CAG has a P/B ratio of 1.87. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.35. Over the past 12 months, CAG's P/B has been as high as 2.23 and as low as 1.70, with a median of 1.94.
Finally, investors will want to recognize that CAG has a P/CF ratio of 14.37. 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. This stock's P/CF looks attractive against its industry's average P/CF of 17.47. Within the past 12 months, CAG's P/CF has been as high as 18.83 and as low as 11.98, with a median of 15.70.
Nomad Foods Limited (NOMD) may be another strong Food - Miscellaneous stock to add to your shortlist. NOMD is a # 1 (Strong Buy) stock with a Value grade of A.
Nomad Foods Limited sports a P/B ratio of 1.10 as well; this compares to its industry's price-to-book ratio of 2.35. In the past 52 weeks, NOMD's P/B has been as high as 1.36, as low as 0.85, with a median of 1.13.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Conagra Brands and Nomad Foods Limited are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAG and NOMD feels like a great value stock at the moment.
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