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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 The Kroger Co. (KR). KR is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.94. This compares to its industry's average Forward P/E of 31.79. KR's Forward P/E has been as high as 15.11 and as low as 11.29, with a median of 13.50, all within the past year.
Investors will also notice that KR has a PEG ratio of 2.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KR's PEG compares to its industry's average PEG of 4.03. Within the past year, KR's PEG has been as high as 3.07 and as low as 0.78, with a median of 2.00.
Another valuation metric that we should highlight is KR's P/B ratio of 5.2. 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 company's current P/B looks solid when compared to its industry's average P/B of 8.30. KR's P/B has been as high as 5.82 and as low as 2.97, with a median of 4.98, over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that The Kroger Co. is likely undervalued currently. And when considering the strength of its earnings outlook, KR sticks out as one of the market's strongest value stocks.
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The Kroger Co. (KR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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