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Are Investors Undervaluing Adecoagro (AGRO) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Adecoagro (AGRO) is a stock many investors are watching right now. AGRO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AGRO has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.53.

Finally, investors will want to recognize that AGRO has a P/CF ratio of 5.72. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AGRO's P/CF compares to its industry's average P/CF of 7.37. Within the past 12 months, AGRO's P/CF has been as high as 6.26 and as low as 2.09, with a median of 4.14.

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


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