Should Value Investors Buy Pilgrim's Pride (PPC) 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.
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.
One stock to keep an eye on is Pilgrim's Pride (PPC). PPC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.55, which compares to its industry's average of 20.94. Over the last 12 months, PPC's Forward P/E has been as high as 18.61 and as low as 5.97, with a median of 12.82.
Investors will also notice that PPC has a PEG ratio of 2.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PPC's PEG compares to its industry's average PEG of 2.97. Over the last 12 months, PPC's PEG has been as high as 3.14 and as low as 0.36, with a median of 2.16.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PPC has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.35.
Finally, investors should note that PPC has a P/CF ratio of 6.26. 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. PPC's P/CF compares to its industry's average P/CF of 10.40. Over the past 52 weeks, PPC's P/CF has been as high as 6.92 and as low as 3.78, with a median of 5.28.
These are only a few of the key metrics included in Pilgrim's Pride'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, PPC looks like an impressive value stock at the moment.
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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
