Is Adecoagro (AGRO) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Adecoagro (AGRO). AGRO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.33, which compares to its industry's average of 12.30. Over the past year, AGRO's Forward P/E has been as high as 12.97 and as low as 5.88, with a median of 9.78.
Another notable valuation metric for AGRO is its P/B ratio of 0.90. 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. This stock's P/B looks solid versus its industry's average P/B of 1.07. Within the past 52 weeks, AGRO's P/B has been as high as 0.98 and as low as 0.68, with a median of 0.78.
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. AGRO has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.9.
Finally, we should also recognize that AGRO has a P/CF ratio of 3.13. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.60. Over the past 52 weeks, AGRO's P/CF has been as high as 3.22 and as low as 1.99, with a median of 2.34.
Value investors will likely look at more than just these metrics, but the above data helps show that Adecoagro is likely undervalued currently. And when considering the strength of its earnings outlook, AGRO sticks out at as one of the market's strongest value stocks.
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Adecoagro S.A. (AGRO) : Free Stock Analysis Report
