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Should Value Investors Buy The Kroger Co. (KR) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is The Kroger Co. (KR - Free Report) . KR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.29, while its industry has an average P/E of 27.69. Over the past 52 weeks, KR's Forward P/E has been as high as 12.92 and as low as 9.49, with a median of 11.17.

Another notable valuation metric for KR is its P/B ratio of 2.99. 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. KR's current P/B looks attractive when compared to its industry's average P/B of 6.96. KR's P/B has been as high as 3.59 and as low as 2.73, with a median of 3.02, over the past year.

Finally, investors will want to recognize that KR has a P/CF ratio of 6.33. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.66. Over the past year, KR's P/CF has been as high as 7.09 and as low as 5.33, with a median of 6.14.

Value investors will likely look at more than just these metrics, but the above data helps show that The Kroger Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, KR sticks out at as one of the market's strongest value stocks.


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