Are Investors Undervaluing B&G Foods (BGS) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 B&G Foods (BGS). BGS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.09, while its industry has an average P/E of 17.19. Over the past year, BGS's Forward P/E has been as high as 15.14 and as low as 7.60, with a median of 12.24.
We should also highlight that BGS has a P/B ratio of 1.05. The P/B ratio pits a stock's market value against 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 2.26. Over the past year, BGS's P/B has been as high as 1.37 and as low as 0.66, with a median of 1.02.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.43. This compares to its industry's average P/S of 0.96.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
