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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company value investors might notice is Conagra Brands (CAG). CAG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.27, which compares to its industry's average of 16.80. Over the past year, CAG's Forward P/E has been as high as 16.78 and as low as 9.29, with a median of 13.86.
We also note that CAG holds a PEG ratio of 1.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CAG's industry currently sports an average PEG of 2.48. Over the past 52 weeks, CAG's PEG has been as high as 2.17 and as low as 1.16, with a median of 1.90.
Another notable valuation metric for CAG is its P/B ratio of 1.89. The P/B ratio pits a stock's market value against 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 3.63. CAG's P/B has been as high as 4.22 and as low as 1.39, with a median of 1.99, over the past year.
These are just a handful of the figures considered in Conagra Brands'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 CAG is an impressive value stock right now.
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