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Are These Consumer Staples Stocks Undervalued Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 stock to keep an eye on is Ingredion (INGR - Free Report) . INGR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.08. This compares to its industry's average Forward P/E of 18.65. Over the last 12 months, INGR's Forward P/E has been as high as 14.47 and as low as 11.54, with a median of 13.53.
Another valuation metric that we should highlight is INGR's P/B ratio of 2.03. 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 2.22. INGR's P/B has been as high as 2.46 and as low as 1.68, with a median of 2.08, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. INGR has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.51.
Finally, investors will want to recognize that INGR has a P/CF ratio of 17.05. 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 18.98. INGR's P/CF has been as high as 27.60 and as low as 8.96, with a median of 17.34, all within the past year.
Another great Food - Miscellaneous stock you could consider is United Natural Foods (UNFI - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.
Additionally, United Natural Foods has a P/B ratio of 1.32 while its industry's price-to-book ratio sits at 2.22. For UNFI, this valuation metric has been as high as 2.03, as low as 1.13, with a median of 1.58 over the past year.
These are only a few of the key metrics included in Ingredion and United Natural Foods strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, INGR and UNFI look like an impressive value stock at the moment.
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Are These Consumer Staples Stocks Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 stock to keep an eye on is Ingredion (INGR - Free Report) . INGR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.08. This compares to its industry's average Forward P/E of 18.65. Over the last 12 months, INGR's Forward P/E has been as high as 14.47 and as low as 11.54, with a median of 13.53.
Another valuation metric that we should highlight is INGR's P/B ratio of 2.03. 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 2.22. INGR's P/B has been as high as 2.46 and as low as 1.68, with a median of 2.08, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. INGR has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.51.
Finally, investors will want to recognize that INGR has a P/CF ratio of 17.05. 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 18.98. INGR's P/CF has been as high as 27.60 and as low as 8.96, with a median of 17.34, all within the past year.
Another great Food - Miscellaneous stock you could consider is United Natural Foods (UNFI - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.
Additionally, United Natural Foods has a P/B ratio of 1.32 while its industry's price-to-book ratio sits at 2.22. For UNFI, this valuation metric has been as high as 2.03, as low as 1.13, with a median of 1.58 over the past year.
These are only a few of the key metrics included in Ingredion and United Natural Foods strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, INGR and UNFI look like an impressive value stock at the moment.