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Should Value Investors Buy Companhia Brasileira de Distribuicao (CBD) Stock?

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Companhia Brasileira de Distribuicao (CBD) is a stock many investors are watching right now. CBD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.25 right now. For comparison, its industry sports an average P/E of 19.04. Over the last 12 months, CBD's Forward P/E has been as high as 29.28 and as low as 3.35, with a median of 11.93.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CBD has a P/S ratio of 0.11. This compares to its industry's average P/S of 0.28.

Another great Retail - Supermarkets stock you could consider is The Kroger Co. (KR), which is a # 2 (Buy) stock with a Value Score of A.

Shares of The Kroger Co. currently holds a Forward P/E ratio of 10.86, and its PEG ratio is 0.93. In comparison, its industry sports average P/E and PEG ratios of 19.04 and 2.81.

KR's price-to-earnings ratio has been as high as 16.61 and as low as 10.86, with a median of 12.93, while its PEG ratio has been as high as 1.98 and as low as 0.93, with a median of 1.42, all within the past year.

The Kroger Co. sports a P/B ratio of 3.33 as well; this compares to its industry's price-to-book ratio of 3.49. In the past 52 weeks, KR's P/B has been as high as 4.81, as low as 3.11, with a median of 3.61.

Value investors will likely look at more than just these metrics, but the above data helps show that Companhia Brasileira de Distribuicao and The Kroger Co. are likely undervalued currently. And when considering the strength of its earnings outlook, CBD and KR sticks out as one of the market's strongest value stocks.


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Companhia Brasileira de Distribuicao (CBD) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
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