We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing Arcos Dorados (ARCO) Right Now?
Read MoreHide Full Article
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 company value investors might notice is Arcos Dorados (ARCO - Free Report) . ARCO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 11.16, which compares to its industry's average of 25.69. Over the past year, ARCO's Forward P/E has been as high as 17.97 and as low as 10.55, with a median of 13.51.
We also note that ARCO holds a PEG ratio of 1.44. 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. ARCO's PEG compares to its industry's average PEG of 1.95. Within the past year, ARCO's PEG has been as high as 1.55 and as low as 0.36, with a median of 0.56.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARCO has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.08.
Finally, we should also recognize that ARCO has a P/CF ratio of 6.40. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.40. Within the past 12 months, ARCO's P/CF has been as high as 7.56 and as low as 5.73, with a median of 6.61.
If you're looking for another solid Retail - Restaurants value stock, take a look at Ruth's Hospitality Group . RUTH is a # 2 (Buy) stock with a Value score of A.
Shares of Ruth's Hospitality Group currently holds a Forward P/E ratio of 12.11, and its PEG ratio is 0.85. In comparison, its industry sports average P/E and PEG ratios of 25.69 and 1.95.
RUTH's Forward P/E has been as high as 16.04 and as low as 10.40, with a median of 12.84. During the same time period, its PEG ratio has been as high as 1, as low as 0.71, with a median of 0.85.
Ruth's Hospitality Group also has a P/B ratio of 3.71 compared to its industry's price-to-book ratio of -23.06. Over the past year, its P/B ratio has been as high as 5.17, as low as 3.67, with a median of 4.30.
These are only a few of the key metrics included in Arcos Dorados and Ruth's Hospitality Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ARCO and RUTH look like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing Arcos Dorados (ARCO) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 company value investors might notice is Arcos Dorados (ARCO - Free Report) . ARCO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 11.16, which compares to its industry's average of 25.69. Over the past year, ARCO's Forward P/E has been as high as 17.97 and as low as 10.55, with a median of 13.51.
We also note that ARCO holds a PEG ratio of 1.44. 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. ARCO's PEG compares to its industry's average PEG of 1.95. Within the past year, ARCO's PEG has been as high as 1.55 and as low as 0.36, with a median of 0.56.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARCO has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.08.
Finally, we should also recognize that ARCO has a P/CF ratio of 6.40. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.40. Within the past 12 months, ARCO's P/CF has been as high as 7.56 and as low as 5.73, with a median of 6.61.
If you're looking for another solid Retail - Restaurants value stock, take a look at Ruth's Hospitality Group . RUTH is a # 2 (Buy) stock with a Value score of A.
Shares of Ruth's Hospitality Group currently holds a Forward P/E ratio of 12.11, and its PEG ratio is 0.85. In comparison, its industry sports average P/E and PEG ratios of 25.69 and 1.95.
RUTH's Forward P/E has been as high as 16.04 and as low as 10.40, with a median of 12.84. During the same time period, its PEG ratio has been as high as 1, as low as 0.71, with a median of 0.85.
Ruth's Hospitality Group also has a P/B ratio of 3.71 compared to its industry's price-to-book ratio of -23.06. Over the past year, its P/B ratio has been as high as 5.17, as low as 3.67, with a median of 4.30.
These are only a few of the key metrics included in Arcos Dorados and Ruth's Hospitality Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ARCO and RUTH look like an impressive value stock at the moment.