CRRFY vs. JRONY: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Retail - Supermarkets sector have probably already heard of Carrefour SA (CRRFY) and Jeronimo Martins SGPS SA (JRONY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Carrefour SA has a Zacks Rank of #2 (Buy), while Jeronimo Martins SGPS SA has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CRRFY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CRRFY currently has a forward P/E ratio of 7.41, while JRONY has a forward P/E of 16.58. We also note that CRRFY has a PEG ratio of 0.48. 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. JRONY currently has a PEG ratio of 3.13.
Another notable valuation metric for CRRFY is its P/B ratio of 0.79. 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. By comparison, JRONY has a P/B of 4.45.
These are just a few of the metrics contributing to CRRFY's Value grade of A and JRONY's Value grade of C.
CRRFY has seen stronger estimate revision activity and sports more attractive valuation metrics than JRONY, so it seems like value investors will conclude that CRRFY is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Carrefour SA (CRRFY) : Free Stock Analysis Report
Jeronimo Martins SGPS SA (JRONY) : Free Stock Analysis Report