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Is Pilgrim's Pride (PPC) a Great Value Stock Right Now?

Zacks Equity Research

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Pilgrim's Pride (PPC). PPC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.11. This compares to its industry's average Forward P/E of 18.73. PPC's Forward P/E has been as high as 19.10 and as low as 11.81, with a median of 14.41, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.72. This compares to its industry's average P/S of 0.8.

Finally, investors should note that PPC has a P/CF ratio of 12.49. 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. PPC's current P/CF looks attractive when compared to its industry's average P/CF of 14.60. PPC's P/CF has been as high as 14.74 and as low as 8.15, with a median of 12.38, all within the past year.

These are just a handful of the figures considered in Pilgrim's Pride'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 PPC is an impressive value stock right now.


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