Is Sonoco (SON) Stock Undervalued 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is Sonoco (SON). SON is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.93 right now. For comparison, its industry sports an average P/E of 12.62. Over the past 52 weeks, SON's Forward P/E has been as high as 10.76 and as low as 9.10, with a median of 10.10.
Investors should also note that SON holds a PEG ratio of 1.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SON's PEG compares to its industry's average PEG of 2.27. SON's PEG has been as high as 2.15 and as low as 1.82, with a median of 2.02, all within 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SON has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.88.
Finally, our model also underscores that SON has a P/CF ratio of 6.61. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.91. Within the past 12 months, SON's P/CF has been as high as 8.52 and as low as 6.06, with a median of 7.25.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sonoco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SON feels like a great value stock at the moment.
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
Sonoco Products Company (SON) : Free Stock Analysis Report
