While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Nomad Foods Limited (NOMD) is a stock many investors are watching right now. NOMD is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 8.47 right now. For comparison, its industry sports an average P/E of 15.96. Over the past year, NOMD's Forward P/E has been as high as 10.54 and as low as 7.79, with a median of 8.97.
Another valuation metric that we should highlight is NOMD's P/B ratio of 1.04. 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 1.73. Over the past year, NOMD's P/B has been as high as 1.16 and as low as 0.88, with a median of 1.02.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NOMD has a P/S ratio of 0.85. This compares to its industry's average P/S of 0.97.
Finally, investors will want to recognize that NOMD has a P/CF ratio of 8.30. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. NOMD's current P/CF looks attractive when compared to its industry's average P/CF of 12.48. Over the past year, NOMD's P/CF has been as high as 10.18 and as low as 7.09, with a median of 8.84.
Value investors will likely look at more than just these metrics, but the above data helps show that Nomad Foods Limited is likely undervalued currently. And when considering the strength of its earnings outlook, NOMD sticks out at as one of the market's strongest value stocks.
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Nomad Foods Limited (NOMD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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