Are Investors Undervaluing Simply Good Foods (SMPL) Right Now?

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

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Simply Good Foods (SMPL) is a stock many investors are watching right now. SMPL is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.75, which compares to its industry's average of 22.19. Over the past 52 weeks, SMPL's Forward P/E has been as high as 20.55 and as low as 12.63, with a median of 17.34.

Finally, investors will want to recognize that SMPL has a P/CF ratio of 15.31. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.85. Over the past year, SMPL's P/CF has been as high as 23.95 and as low as 15.19, with a median of 20.34.

These are just a handful of the figures considered in Simply Good Foods's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SMPL is an impressive value stock right now.

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

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