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Are Investors Undervaluing The Chef's Warehouse (CHEF) 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is The Chef's Warehouse (CHEF). CHEF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

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. CHEF has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.88.

Finally, we should also recognize that CHEF has a P/CF ratio of 17.60. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.71. Within the past 12 months, CHEF's P/CF has been as high as 29.16 and as low as 16.46, with a median of 20.51.

These figures are just a handful of the metrics value investors tend to look at, but they help show that The Chef's Warehouse is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHEF feels like a great value stock at the moment.

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The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report

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