Is Central Garden (CENTA) a Great Value Stock Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Central Garden (CENTA) is a stock many investors are watching right now. CENTA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We should also highlight that CENTA has a P/B ratio of 2. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.43. Over the past year, CENTA's P/B has been as high as 2 and as low as 1.16, with a median of 1.62.
Finally, we should also recognize that CENTA has a P/CF ratio of 14.12. 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 stock's P/CF looks attractive against its industry's average P/CF of 16.85. Over the past 52 weeks, CENTA's P/CF has been as high as 14.12 and as low as 7.88, with a median of 11.20.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Central Garden is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CENTA feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.