Back to top

Image: Bigstock

Are Investors Undervaluing Berry Global (BERY) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is Berry Global (BERY - Free Report) . BERY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.84 right now. For comparison, its industry sports an average P/E of 15.55. Over the past 52 weeks, BERY's Forward P/E has been as high as 11.83 and as low as 6.19, with a median of 9.83.

BERY is also sporting a PEG ratio of 1.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BERY's PEG compares to its industry's average PEG of 1.26. Over the past 52 weeks, BERY's PEG has been as high as 1.15 and as low as 0.50, with a median of 0.86.

We should also highlight that BERY has a P/B ratio of 3.86. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 6.79. BERY's P/B has been as high as 3.94 and as low as 2, with a median of 3.35, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BERY has a P/S ratio of 0.61. This compares to its industry's average P/S of 1.06.

Finally, our model also underscores that BERY has a P/CF ratio of 5.04. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 20.13. BERY's P/CF has been as high as 6.52 and as low as 3.44, with a median of 5.19, all within the past year.

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


See More Zacks Research for These Tickers


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


Berry Global Group, Inc. (BERY) - free report >>

Published in