Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One company to watch right now is Performance Food Group (PFGC). PFGC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 16.19, which compares to its industry's average of 21. PFGC's Forward P/E has been as high as 17.77 and as low as 12.41, with a median of 15, all within the past year.
PFGC is also sporting a PEG ratio of 0.82. 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. PFGC's PEG compares to its industry's average PEG of 1.16. Over the last 12 months, PFGC's PEG has been as high as 0.98 and as low as 0.76, with a median of 0.84.
We should also highlight that PFGC has a P/B ratio of 3.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.70. Within the past 52 weeks, PFGC's P/B has been as high as 3.35 and as low as 2.32, with a median of 2.86.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PFGC has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.48.
Finally, we should also recognize that PFGC has a P/CF ratio of 12.89. 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. PFGC's P/CF compares to its industry's average P/CF of 13.49. Within the past 12 months, PFGC's P/CF has been as high as 13.95 and as low as 9.58, with a median of 11.62.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Performance Food Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PFGC feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
