Are Investors Undervaluing Cracker Barrel Old Country Store (CBRL) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Cracker Barrel Old Country Store (CBRL). CBRL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.05. This compares to its industry's average Forward P/E of 23.90. Over the past 52 weeks, CBRL's Forward P/E has been as high as 18.69 and as low as 13.05, with a median of 16.20.
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. CBRL has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.97.
Finally, we should also recognize that CBRL has a P/CF ratio of 9.02. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CBRL's current P/CF looks attractive when compared to its industry's average P/CF of 19. Over the past year, CBRL's P/CF has been as high as 12.11 and as low as 8.27, with a median of 10.15.
If you're looking for another solid Retail - Restaurants value stock, take a look at El Pollo Loco (LOCO). LOCO is a # 2 (Buy) stock with a Value score of A.
El Pollo Loco also has a P/B ratio of 1.31 compared to its industry's price-to-book ratio of -22.69. Over the past year, its P/B ratio has been as high as 1.69, as low as 0.95, with a median of 1.21.
Value investors will likely look at more than just these metrics, but the above data helps show that Cracker Barrel Old Country Store and El Pollo Loco are likely undervalued currently. And when considering the strength of its earnings outlook, CBRL and LOCO sticks out as one of the market's strongest value stocks.
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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
El Pollo Loco Holdings, Inc. (LOCO) : Free Stock Analysis Report
