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AGRO vs. LMNR: Which Stock Is the Better Value Option?

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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 is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Adecoagro is sporting 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 only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 7.11, while LMNR has a forward P/E of 95.64. We also note that AGRO has a PEG ratio of 1.85. 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 6.38.

Another notable valuation metric for AGRO is its P/B ratio of 0.86. 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.

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 >>

Limoneira Co (LMNR) - free report >>

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