Should Value Investors Buy Central Garden & Pet (CENTA) Stock?
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 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 stock to keep an eye on is Central Garden & Pet (CENTA). CENTA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CENTA has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.81.
Finally, investors should note that CENTA has a P/CF ratio of 10.74. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CENTA's current P/CF looks attractive when compared to its industry's average P/CF of 33.36. Within the past 12 months, CENTA's P/CF has been as high as 11.27 and as low as 8.75, with a median of 9.85.
These are only a few of the key metrics included in Central Garden & Pet's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CENTA looks like an impressive value stock at the moment.
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Central Garden & Pet Company (CENTA) : Free Stock Analysis Report
