Should Value Investors Buy Ingles (IMKTA) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is Ingles (IMKTA). IMKTA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.58 right now. For comparison, its industry sports an average P/E of 22.58. Over the last 12 months, IMKTA's Forward P/E has been as high as 11.05 and as low as 7.79, with a median of 9.17.
Investors should also recognize that IMKTA has a P/B ratio of 1.30. 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 solid versus its industry's average P/B of 3.64. Over the past 12 months, IMKTA's P/B has been as high as 1.49 and as low as 0.84, with a median of 1.03.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. IMKTA has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.26.
Finally, investors should note that IMKTA has a P/CF ratio of 4.41. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.67. Over the past year, IMKTA's P/CF has been as high as 5.04 and as low as 2.68, with a median of 3.38.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Ingles is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IMKTA feels like a great value stock at the moment.
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Ingles Markets, Incorporated (IMKTA) : Free Stock Analysis Report
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