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ACI or PRPL: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Consumer Products - Staples sector might want to consider either Albertsons Companies, Inc. (ACI) or Purple Innovation (PRPL). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Albertsons Companies, Inc. has a Zacks Rank of #2 (Buy), while Purple Innovation has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ACI is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ACI currently has a forward P/E ratio of 5.40, while PRPL has a forward P/E of 40.90. We also note that ACI has a PEG ratio of 0.45. 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. PRPL currently has a PEG ratio of 2.73.

Another notable valuation metric for ACI is its P/B ratio of 5.79. 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. By comparison, PRPL has a P/B of 52.04.

These metrics, and several others, help ACI earn a Value grade of A, while PRPL has been given a Value grade of D.

ACI sticks out from PRPL in both our Zacks Rank and Style Scores models, so value investors will likely feel that ACI is the better option right now.


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