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Are Investors Undervaluing Danone (DANOY) Right Now?

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.

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.

Danone (DANOY) is a stock many investors are watching right now. DANOY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.33, while its industry has an average P/E of 18.57. Over the past 52 weeks, DANOY's Forward P/E has been as high as 17.59 and as low as 12.71, with a median of 15.57.

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We should also highlight that DANOY has a P/B ratio of 1.72. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DANOY's current P/B looks attractive when compared to its industry's average P/B of 2.42. DANOY's P/B has been as high as 2.22 and as low as 1.51, with a median of 1.85, over the past year.

These are just a handful of the figures considered in Danone'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 DANOY is an impressive value stock right now.

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Zacks Investment Research