Are Investors Undervaluing Pilgrim's Pride (PPC) 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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Pilgrim's Pride (PPC). PPC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PPC has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.47.
Finally, investors will want to recognize that PPC has a P/CF ratio of 6.17. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.39. Over the past year, PPC's P/CF has been as high as 13.71 and as low as 3.78, with a median of 5.28.
If you're looking for another solid Food - Meat Products value stock, take a look at Tyson Foods (TSN). TSN is a # 2 (Buy) stock with a Value score of A.
Tyson Foods is currently trading with a Forward P/E ratio of 12.92 while its PEG ratio sits at 1.47. Both of the company's metrics compare favorably to its industry's average P/E of 15.79 and average PEG ratio of 2.27.
Over the past year, TSN's P/E has been as high as 13.02, as low as 7.43, with a median of 10.27; its PEG ratio has been as high as 1.56, as low as 1.34, with a median of 1.24 during the same time period.
Additionally, Tyson Foods has a P/B ratio of 1.12 while its industry's price-to-book ratio sits at 1.62. For TSN, this valuation metric has been as high as 1.81, as low as 1.02, with a median of 1.21 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Pilgrim's Pride and Tyson Foods are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PPC and TSN feels like a great value stock at the moment.
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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
