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Are Investors Undervaluing Tesco (TSCDY) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Tesco (TSCDY - Free Report) . TSCDY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.40, while its industry has an average P/E of 27.79. Over the past 52 weeks, TSCDY's Forward P/E has been as high as 14.63 and as low as 10.58, with a median of 12.33.

Investors should also note that TSCDY holds a PEG ratio of 2.01. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSCDY's industry currently sports an average PEG of 3.19. Over the past 52 weeks, TSCDY's PEG has been as high as 2.60 and as low as 0.42, with a median of 0.54.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Tesco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSCDY feels like a great value stock at the moment.


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