Are Investors Undervaluing Greif (GEF) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Greif (GEF) is a stock many investors are watching right now. GEF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 12.33. This compares to its industry's average Forward P/E of 13.13. Over the past 52 weeks, GEF's Forward P/E has been as high as 13.10 and as low as 8.14, with a median of 10.94.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GEF has a P/S ratio of 0.59. This compares to its industry's average P/S of 0.91.
Finally, our model also underscores that GEF has a P/CF ratio of 6.41. 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. GEF's current P/CF looks attractive when compared to its industry's average P/CF of 21.39. Over the past year, GEF's P/CF has been as high as 6.55 and as low as 4.13, with a median of 5.20.
These are only a few of the key metrics included in Greif's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GEF looks like an impressive value stock at the moment.
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Greif, Inc. (GEF) : Free Stock Analysis Report
