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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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

The Kroger Co. (KR - Free Report) is a stock many investors are watching right now. KR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.11. This compares to its industry's average Forward P/E of 28.02. Over the past year, KR's Forward P/E has been as high as 12.92 and as low as 9.49, with a median of 11.40.

Another notable valuation metric for KR is its P/B ratio of 3.20. 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. This stock's P/B looks attractive against its industry's average P/B of 7.08. Within the past 52 weeks, KR's P/B has been as high as 3.59 and as low as 2.73, with a median of 3.02.

Finally, our model also underscores that KR has a P/CF ratio of 6.11. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. KR's current P/CF looks attractive when compared to its industry's average P/CF of 19.99. KR's P/CF has been as high as 7.09 and as low as 5.33, with a median of 5.92, all within the past year.

These are only a few of the key metrics included in The Kroger Co.'s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, KR looks like an impressive value stock at the moment.


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