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Are Investors Undervaluing Ingredion (INGR) Right Now?

Zacks

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.

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 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.

Ingredion (INGR) is a stock many investors are watching right now. INGR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.89, which compares to its industry’s average of 19.27. Over the past 52 weeks, INGR’s Forward P/E has been as high as 14.25 and as low as 8.62, with a median of 11.59.


Investors should also note that INGR holds a PEG ratio of 1.05. 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. INGR’s PEG compares to its industry’s average PEG of 2.62. Within the past year, INGR’s PEG has been as high as 1.18 and as low as 1.05, with a median of 1.16.

Another valuation metric that we should highlight is INGR’s P/B ratio of 1.70. The P/B ratio pits a stock’s market value against 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 2.20. Within the past 52 weeks, INGR’s P/B has been as high as 2.78 and as low as 1.48, with a median of 2.13.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. INGR has a P/S ratio of 0.78. This compares to its industry’s average P/S of 0.99.

These are only a few of the key metrics included in Ingredion’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, INGR looks like an impressive value stock at the moment.


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