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AGRO or LMNR: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Agriculture - Operations sector have probably already heard of Adecoagro (AGRO - Free Report) and Limoneira (LMNR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Adecoagro is sporting a Zacks Rank of #1 (Strong Buy), while Limoneira has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AGRO is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AGRO currently has a forward P/E ratio of 5.96, while LMNR has a forward P/E of 96.41. We also note that AGRO has a PEG ratio of 1.55. 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. LMNR currently has a PEG ratio of 6.43.

Another notable valuation metric for AGRO is its P/B ratio of 0.71. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LMNR has a P/B of 2.02.

Based on these metrics and many more, AGRO holds a Value grade of A, while LMNR has a Value grade of D.

AGRO has seen stronger estimate revision activity and sports more attractive valuation metrics than LMNR, so it seems like value investors will conclude that AGRO is the superior option right now.


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Adecoagro S.A. (AGRO) - free report >>

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