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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 United Natural Foods (UNFI). UNFI is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A.
Another notable valuation metric for UNFI is its 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. UNFI's current P/B looks attractive when compared to its industry's average P/B of 1.71. Over the past year, 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.84. Over the past year, UNFI's P/CF has been as high as 8.41 and as low as 4.47, with a median of 6.37.
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).