Yahoo Finance Are Investors Undervaluing Sodexo (SDXAY) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Sodexo (SDXAY). SDXAY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.40 right now. For comparison, its industry sports an average P/E of 21.59. Over the past 52 weeks, SDXAY's Forward P/E has been as high as 21.33 and as low as 14.08, with a median of 16.83.
Another notable valuation metric for SDXAY is its P/B ratio of 2.61. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SDXAY's current P/B looks attractive when compared to its industry's average P/B of 3.05. Within the past 52 weeks, SDXAY's P/B has been as high as 3.81 and as low as 2.54, with a median of 3.41.
If you're looking for another solid Business - Services value stock, take a look at Viad Corp (VVI). VVI is a # 2 (Buy) stock with a Value score of A.
Viad Corp is trading at a forward earnings multiple of 17.70 at the moment, with a PEG ratio of 1.18. This compares to its industry's average P/E of 21.59 and average PEG ratio of 1.89.
Over the last 12 months, VVI's P/E has been as high as 60.33, as low as 16.76, with a median of 24.12, and its PEG ratio has been as high as 4.02, as low as 1.12, with a median of 1.61.
Additionally, Viad Corp has a P/B ratio of 5.89 while its industry's price-to-book ratio sits at 3.05. For VVI, this valuation metric has been as high as 7.22, as low as 3.40, with a median of 5.46 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Sodexo and Viad Corp are likely undervalued currently. And when considering the strength of its earnings outlook, SDXAY and VVI sticks out as one of the market's strongest value stocks.
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