Should Value Investors Buy Pilgrim's Pride (PPC) Stock?
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Pilgrim's Pride (PPC). PPC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 14.82 right now. For comparison, its industry sports an average P/E of 15.55. Over the past year, PPC's Forward P/E has been as high as 19.10 and as low as 8.76, with a median of 13.82.
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. PPC has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.8.
Value investors will likely look at more than just these metrics, but the above data helps show that Pilgrim's Pride is likely undervalued currently. And when considering the strength of its earnings outlook, PPC sticks out at as one of the market's strongest value stocks.
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