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Are Investors Undervaluing TreeHouse Foods (THS) 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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is TreeHouse Foods (THS - Free Report) . THS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Another notable valuation metric for THS is its P/B ratio of 1.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. THS's current P/B looks attractive when compared to its industry's average P/B of 2.16. Within the past 52 weeks, THS's P/B has been as high as 1.55 and as low as 0.93, with a median of 1.20.

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. THS has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.23.

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


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