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, 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.
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.
Grocery Outlet (GO) is a stock many investors are watching right now. GO is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 16.32, while its industry has an average P/E of 20.41. Over the past 52 weeks, GO's Forward P/E has been as high as 22.28 and as low as 11.17, with a median of 17.03.
Investors should also note that GO holds a PEG ratio of 3.06. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GO's industry has an average PEG of 3.31 right now. Over the last 12 months, GO's PEG has been as high as 16.85 and as low as 1.65, with a median of 3.34.
Finally, our model also underscores that GO has a P/CF ratio of 9.95. 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. GO's current P/CF looks attractive when compared to its industry's average P/CF of 14.46. Over the past year, GO's P/CF has been as high as 14.46 and as low as 7.25, with a median of 10.72.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Grocery Outlet is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GO feels like a great value stock at the moment.
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Grocery Outlet Holding Corp. (GO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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