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, 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.
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.
One company to watch right now is Central Garden & Pet (CENT). CENT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for CENT is its P/B ratio of 1.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CENT's current P/B looks attractive when compared to its industry's average P/B of 3.79. CENT's P/B has been as high as 1.82 and as low as 1.40, with a median of 1.61, over the past year.
Finally, investors should note that CENT has a P/CF ratio of 10.89. 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. CENT's P/CF compares to its industry's average P/CF of 27.55. CENT's P/CF has been as high as 11.90 and as low as 8.19, with a median of 10.01, all within the past year.
Another great Consumer Products - Discretionary stock you could consider is Colruyt (CUYTY), which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, Colruyt holds a P/B ratio of 2.40 and its industry's price-to-book ratio is 3.79. CUYTY's P/B has been as high as 2.40, as low as 1.19, with a median of 1.52 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Central Garden & Pet and Colruyt are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CENT and CUYTY feels like a great value stock at the moment.
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