Should Value Investors Buy Associated British Foods (ASBFY) 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.

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

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.

Associated British Foods (ASBFY) is a stock many investors are watching right now. ASBFY is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 10.43, while its industry has an average P/E of 14.34. Over the last 12 months, ASBFY's Forward P/E has been as high as 12.63 and as low as 9.40, with a median of 11.26.

Another valuation metric that we should highlight is ASBFY's P/B ratio of 1.4. 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 attractive against its industry's average P/B of 1.68. ASBFY's P/B has been as high as 1.65 and as low as 1.18, with a median of 1.46, over the past year.

Another great Food - Miscellaneous stock you could consider is United Natural Foods (UNFI), which is a Zacks Rank of #1 (Strong Buy) stock with a Value Score of A.

United Natural Foods sports a P/B ratio of 1.11 as well; this compares to its industry's price-to-book ratio of 1.68. In the past 52 weeks, UNFI's P/B has been as high as 1.27, as low as 0.56, with a median of 0.99.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Associated British Foods and United Natural Foods are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ASBFY and UNFI feels like a great value stock at the moment.

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

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