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Are Investors Undervaluing Adecoagro (AGRO) Right Now?

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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.

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 stock to keep an eye on is Adecoagro (AGRO - Free Report) . AGRO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.75 right now. For comparison, its industry sports an average P/E of 12.54. Over the past 52 weeks, AGRO's Forward P/E has been as high as 12.86 and as low as 6.22, with a median of 7.82.

Another valuation metric that we should highlight is AGRO's P/B ratio of 0.73. The P/B is a method of comparing a stock's market value to 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 0.87. AGRO's P/B has been as high as 1.06 and as low as 0.73, with a median of 0.89, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AGRO has a P/S ratio of 0.79. This compares to its industry's average P/S of 0.82.

These are only a few of the key metrics included in Adecoagro's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AGRO looks like an impressive value stock at the moment.


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