Should Value Investors Buy Tesco (TSCDY) 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.
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 to watch right now is Tesco (TSCDY). TSCDY is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 15.11, which compares to its industry's average of 32.97. Over the last 12 months, TSCDY's Forward P/E has been as high as 15.36 and as low as 11.17, with a median of 13.64.
Investors will also notice that TSCDY has a PEG ratio of 1.40. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TSCDY's industry currently sports an average PEG of 4.18. Over the last 12 months, TSCDY's PEG has been as high as 2.04 and as low as 1.32, with a median of 1.65.
These are only a few of the key metrics included in Tesco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TSCDY looks like an impressive value stock at the moment.
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Tesco PLC (TSCDY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
