Yahoo Finance Should Value Investors Buy Tyson Foods (TSN) Stock?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Tyson Foods (TSN). TSN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
TSN is also sporting a PEG ratio of 0.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSN's industry has an average PEG of 0.66 right now. Within the past year, TSN's PEG has been as high as 0.50 and as low as 0.34, with a median of 0.37.
Another valuation metric that we should highlight is TSN's P/B ratio of 1.14. The P/B ratio is used to compare a stock's market value with 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 1.66. Over the past year, TSN's P/B has been as high as 1.21 and as low as 0.86, with a median of 1.01.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TSN has a P/S ratio of 0.4. This compares to its industry's average P/S of 1.03.
Finally, investors will want to recognize that TSN has a P/CF ratio of 15.65. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.44. Over the past year, TSN's P/CF has been as high as 16.59 and as low as 6.05, with a median of 11.05.
Value investors will likely look at more than just these metrics, but the above data helps show that Tyson Foods is likely undervalued currently. And when considering the strength of its earnings outlook, TSN sticks out at as one of the market's strongest value stocks.
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Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
