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Are Investors Undervaluing Pilgrim's Pride (PPC) Right Now?

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Zacks Equity Research
·3 min read
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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

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 a Value grade of A. The stock holds a P/E ratio of 10.13, while its industry has an average P/E of 17.41. Over the last 12 months, PPC's Forward P/E has been as high as 18.80 and as low as 7.08, with a median of 10.75.

We should also highlight that PPC has a P/B ratio of 1.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.55. PPC's P/B has been as high as 3.58 and as low as 1.47, with a median of 1.84, over the past year.

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. PPC has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.71.

Finally, our model also underscores that PPC has a P/CF ratio of 8.94. 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 13.38. Over the past year, PPC's P/CF has been as high as 13.08 and as low as 5.41, with a median of 7.07.

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


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