Are Investors Undervaluing These Retail-Wholesale Stocks 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is Companhia Brasileira de Distribuicao (CBD). CBD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.17 right now. For comparison, its industry sports an average P/E of 19.29. Over the last 12 months, CBD's Forward P/E has been as high as 30.84 and as low as 3.52, with a median of 21.11.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CBD has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.27.
If you're looking for another solid Retail - Supermarkets value stock, take a look at Carrefour (CRRFY). CRRFY is a # 2 (Buy) stock with a Value score of A.
Carrefour is currently trading with a Forward P/E ratio of 9.94 while its PEG ratio sits at 0.63. Both of the company's metrics compare favorably to its industry's average P/E of 19.29 and average PEG ratio of 2.43.
CRRFY's price-to-earnings ratio has been as high as 11.94 and as low as 8.22, with a median of 9.98, while its PEG ratio has been as high as 1.43 and as low as 0.54, with a median of 0.76, all within the past year.
Carrefour sports a P/B ratio of 1.23 as well; this compares to its industry's price-to-book ratio of 3.25. In the past 52 weeks, CRRFY's P/B has been as high as 1.36, as low as 0.98, with a median of 1.15.
These are just a handful of the figures considered in Companhia Brasileira de Distribuicao and Carrefour's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CBD and CRRFY is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Companhia Brasileira de Distribuicao (CBD) : Free Stock Analysis Report
Carrefour SA (CRRFY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
