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Should Value Investors Buy Performance Food Group (PFGC) Stock?

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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.

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.

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 stock to keep an eye on is Performance Food Group (PFGC - Free Report) . PFGC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also note that PFGC holds a PEG ratio of 1.01. 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. PFGC's PEG compares to its industry's average PEG of 1.49. Within the past year, PFGC's PEG has been as high as 1.13 and as low as 0.80, with a median of 0.95.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PFGC has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.23.

Investors could also keep in mind Sprouts Farmers Market (SFM - Free Report) , an Food - Natural Foods Products stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of Sprouts Farmers Market currently holds a Forward P/E ratio of 13.26, and its PEG ratio is 1.39. In comparison, its industry sports average P/E and PEG ratios of 14.31 and 1.49.

SFM's Forward P/E has been as high as 14.40 and as low as 10.38, with a median of 12.79. During the same time period, its PEG ratio has been as high as 1.98, as low as 1.28, with a median of 1.69.

Sprouts Farmers Market also has a P/B ratio of 3.37 compared to its industry's price-to-book ratio of 2.45. Over the past year, its P/B ratio has been as high as 3.58, as low as 2.51, with a median of 3.20.

These are just a handful of the figures considered in Performance Food Group and Sprouts Farmers Market's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PFGC and SFM is an impressive value stock right now.


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