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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Pilgrim's Pride (PPC) is a stock many investors are watching right now. PPC is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.37, which compares to its industry's average of 12.45. Over the past 52 weeks, PPC's Forward P/E has been as high as 11.84 and as low as 8.37, with a median of 9.68.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PPC has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.58.

Finally, our model also underscores that PPC has a P/CF ratio of 5.77. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.31. Over the past 52 weeks, PPC's P/CF has been as high as 8.97 and as low as 5.77, with a median of 7.41.

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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This article originally published on Zacks Investment Research (zacks.com).

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