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Is B&G Foods (BGS) Stock Undervalued Right Now?

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·3 min read
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  • BGS

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

B&G Foods (BGS) is a stock many investors are watching right now. BGS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.66 right now. For comparison, its industry sports an average P/E of 20.26. BGS's Forward P/E has been as high as 16.95 and as low as 10.93, with a median of 12.96, all within the past year.

Another valuation metric that we should highlight is BGS's P/B ratio of 2.25. 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. BGS's current P/B looks attractive when compared to its industry's average P/B of 2.37. Within the past 52 weeks, BGS's P/B has been as high as 3.17 and as low as 1.56, with a median of 2.18.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BGS has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.54.

Finally, investors will want to recognize that BGS has a P/CF ratio of 8.86. 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. BGS's P/CF compares to its industry's average P/CF of 20.54. BGS's P/CF has been as high as 12.55 and as low as 7.62, with a median of 9.14, all within the past year.

These are just a handful of the figures considered in B&G Foods's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BGS is an impressive value stock right now.


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