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Is United Natural Foods (UNFI) Stock Undervalued Right Now?

·2 min read

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 United Natural Foods (UNFI). UNFI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.17, which compares to its industry's average of 19.23. UNFI's Forward P/E has been as high as 15.89 and as low as 8.10, with a median of 10.22, all within the past year.

Another notable valuation metric for UNFI is its P/B ratio of 1.55. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.25. Within the past 52 weeks, UNFI's P/B has been as high as 2.03 and as low as 1.22, with a median of 1.42.

Finally, investors should note that UNFI has a P/CF ratio of 5.37. 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. UNFI's current P/CF looks attractive when compared to its industry's average P/CF of 18.77. UNFI's P/CF has been as high as 7.14 and as low as 4.19, with a median of 5.04, all within the past year.

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


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