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Are Investors Undervaluing Spartan Stores (SPTN) Right Now?

Zacks Equity Research
·3 mins read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Spartan Stores (SPTN) is a stock many investors are watching right now. SPTN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.78 right now. For comparison, its industry sports an average P/E of 15.70. SPTN's Forward P/E has been as high as 14.89 and as low as 6.03, with a median of 9.80, all within the past year.

SPTN is also sporting a PEG ratio of 1.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SPTN's PEG compares to its industry's average PEG of 1.73. Within the past year, SPTN's PEG has been as high as 1.94 and as low as 0.86, with a median of 1.32.

Investors should also recognize that SPTN has a P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SPTN's current P/B looks attractive when compared to its industry's average P/B of 2.25. Within the past 52 weeks, SPTN's P/B has been as high as 1.17 and as low as 0.47, with a median of 0.71.

Finally, investors should note that SPTN has a P/CF ratio of 7.55. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. SPTN's current P/CF looks attractive when compared to its industry's average P/CF of 8.44. Over the past 52 weeks, SPTN's P/CF has been as high as 7.59 and as low as 3.53, with a median of 5.55.

Value investors will likely look at more than just these metrics, but the above data helps show that Spartan Stores is likely undervalued currently. And when considering the strength of its earnings outlook, SPTN sticks out at as one of the market's strongest value stocks.


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