Is Tyson Foods (TSN) a Great Value Stock Right Now?
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...
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Tyson Foods (TSN). TSN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.49, which compares to its industry's average of 14.40. Over the past 52 weeks, TSN's Forward P/E has been as high as 13.20 and as low as 9.76, with a median of 11.58.
Another valuation metric that we should highlight is TSN's P/B ratio of 1.75. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. TSN's current P/B looks attractive when compared to its industry's average P/B of 2.46. Over the past 12 months, TSN's P/B has been as high as 1.83 and as low as 1.34, with a median of 1.67.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TSN has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.82.
Finally, investors will want to recognize that TSN has a P/CF ratio of 8.09. 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. TSN's current P/CF looks attractive when compared to its industry's average P/CF of 13.63. Over the past year, TSN's P/CF has been as high as 8.70 and as low as 6.23, with a median of 7.78.
These are only a few of the key metrics included in Tyson Foods'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, TSN looks like an impressive value stock at the moment.
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