Are Investors Undervaluing These Consumer Staples Stocks 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...
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Albertsons Companies (ACI) is a stock many investors are watching right now. ACI 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 12.23, which compares to its industry's average of 22.88. Over the past 52 weeks, ACI's Forward P/E has been as high as 14.98 and as low as 5.35, with a median of 10.29.
ACI is also sporting a PEG ratio of 1.53. 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. ACI's PEG compares to its industry's average PEG of 2.27. Over the past 52 weeks, ACI's PEG has been as high as 1.54 and as low as 0.45, with a median of 0.86.
Finally, our model also underscores that ACI has a P/CF ratio of 7.29. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ACI's current P/CF looks attractive when compared to its industry's average P/CF of 13.61. Over the past year, ACI's P/CF has been as high as 8.96 and as low as 2.34, with a median of 5.01.
Another great Consumer Products - Staples stock you could consider is ARKO (ARKO), which is a # 2 (Buy) stock with a Value Score of A.
Additionally, ARKO has a P/B ratio of 4.38 while its industry's price-to-book ratio sits at 4.73. For ARKO, this valuation metric has been as high as 7.86, as low as 4.17, with a median of 5.43 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Albertsons Companies and ARKO are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACI and ARKO feels like a great value stock at the moment.
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Albertsons Companies, Inc. (ACI): Free Stock Analysis Report
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