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Is B&G Foods (BGS) a Great Value Stock Right Now?

Zacks Equity Research
·2 min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

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.

B&G Foods (BGS) is a stock many investors are watching right now. BGS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 11.96. This compares to its industry's average Forward P/E of 19.11. BGS's Forward P/E has been as high as 14.17 and as low as 7.03, with a median of 9.96, all within the past year.

We should also highlight that BGS has a P/B ratio of 1.92. 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 stock's P/B looks attractive against its industry's average P/B of 2.20. Over the past year, BGS's P/B has been as high as 2 and as low as 0.92, with a median of 1.37.

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. BGS has a P/S ratio of 0.88. This compares to its industry's average P/S of 1.15.

These figures are just a handful of the metrics value investors tend to look at, but they help show that B&G Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BGS feels like a great value stock at the moment.


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