The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 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.
One company value investors might notice is United Natural Foods (UNFI). UNFI is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is UNFI's P/B ratio of 1.11. The P/B is a method of comparing a stock's market value to 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 1.65. Within the past 52 weeks, UNFI's P/B has been as high as 1.27 and as low as 0.56, with a median of 0.99.
Finally, investors will want to recognize that UNFI has a P/CF ratio of 6.80. 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. UNFI's current P/CF looks attractive when compared to its industry's average P/CF of 10.50. UNFI's P/CF has been as high as 8.41 and as low as 4.47, with a median of 6.37, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that United Natural Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UNFI feels like a great value stock at the moment.
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United Natural Foods, Inc. (UNFI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).