Yahoo Finance Should Value Investors Buy Tyson Foods (TSN) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Tyson Foods (TSN). TSN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
TSN is also sporting a PEG ratio of 0.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TSN's PEG compares to its industry's average PEG of 0.65. Within the past year, TSN's PEG has been as high as 0.50 and as low as 0.34, with a median of 0.36.
Another valuation metric that we should highlight is TSN's P/B ratio of 1.18. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.68. Within the past 52 weeks, TSN's P/B has been as high as 1.22 and as low as 0.88, with a median of 1.01.
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. TSN has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.96.
Finally, investors will want to recognize that TSN has a P/CF ratio of 13.27. 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. TSN's P/CF compares to its industry's average P/CF of 14.92. Over the past 52 weeks, TSN's P/CF has been as high as 15.74 and as low as 6.33, with a median of 11.27.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.
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Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
