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Should Value Investors Buy Imperial Tobacco Group PLC (IMBBY) Stock?

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Imperial Tobacco Group PLC (IMBBY). IMBBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 5.05, which compares to its industry's average of 10.49. Over the past 52 weeks, IMBBY's Forward P/E has been as high as 7.40 and as low as 4.24, with a median of 6.04.

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Investors will also notice that IMBBY has a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IMBBY's industry currently sports an average PEG of 1.75. Over the past 52 weeks, IMBBY's PEG has been as high as 1.07 and as low as 0.72, with a median of 0.94.

These are just a handful of the figures considered in Imperial Tobacco Group PLC'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 IMBBY is an impressive value stock right now.


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