Are Investors Undervaluing Conagra Brands (CAG) Right Now?

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.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Conagra Brands (CAG). CAG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.80, while its industry has an average P/E of 17.93. Over the past 52 weeks, CAG's Forward P/E has been as high as 14.76 and as low as 11.52, with a median of 13.58.

Another notable valuation metric for CAG is its P/B ratio of 1.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.94. Over the past year, CAG's P/B has been as high as 2.05 and as low as 1.63, with a median of 1.87.

Finally, we should also recognize that CAG has a P/CF ratio of 17.44. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.85. Within the past 12 months, CAG's P/CF has been as high as 18.62 and as low as 9.29, with a median of 12.09.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Conagra Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAG feels like a great value stock at the moment.

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