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AGRO vs. LMNR: Which Stock Should Value Investors Buy Now?

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Investors interested in Agriculture - Operations stocks are likely familiar with Adecoagro (AGRO - Free Report) and Limoneira (LMNR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Adecoagro has a Zacks Rank of #1 (Strong Buy), while Limoneira has a Zacks Rank of #3 (Hold). This means that AGRO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

AGRO currently has a forward P/E ratio of 5.83, while LMNR has a forward P/E of 100.50. We also note that AGRO has a PEG ratio of 1.52. 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 6.70.

Another notable valuation metric for AGRO is its P/B ratio of 0.70. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LMNR has a P/B of 2.11.

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

AGRO stands above LMNR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AGRO is the superior value option right now.


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

Limoneira Co (LMNR) - free report >>

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