Should Value Investors Buy Central Garden (CENTA) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company to watch right now is Central Garden (CENTA). CENTA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another notable valuation metric for CENTA is its P/B ratio of 1.91. 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 2.05 and as low as 1.28, with a median of 1.72.
Finally, our model also underscores that CENTA has a P/CF ratio of 12.20. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CENTA's current P/CF looks attractive when compared to its industry's average P/CF of 16.85. Over the past year, CENTA's P/CF has been as high as 13.35 and as low as 8.82, with a median of 11.55.
These are just a handful of the figures considered in Central Garden'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 CENTA is an impressive value stock right now.
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Central Garden Pet Company (CENTA): Free Stock Analysis Report
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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.