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Are Investors Undervaluing Ahold NV (ADRNY) Right Now?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Ahold NV (ADRNY) is a stock many investors are watching right now. ADRNY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.90, while its industry has an average P/E of 19.12. Over the last 12 months, ADRNY's Forward P/E has been as high as 15.47 and as low as 10.77, with a median of 13.37.

We also note that ADRNY holds a PEG ratio of 2.73. 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. ADRNY's PEG compares to its industry's average PEG of 3.07. Within the past year, ADRNY's PEG has been as high as 3.16 and as low as 2, with a median of 2.67.

Finally, our model also underscores that ADRNY has a P/CF ratio of 5.37. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ADRNY's current P/CF looks attractive when compared to its industry's average P/CF of 16.33. ADRNY's P/CF has been as high as 6.08 and as low as 4.39, with a median of 5.34, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ahold NV is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADRNY feels like a great value stock at the moment.


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