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Are Investors Undervaluing Imperial Tobacco Group (IMBBY) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Imperial Tobacco Group (IMBBY - Free Report) . IMBBY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.88, while its industry has an average P/E of 11.98. Over the past 52 weeks, IMBBY's Forward P/E has been as high as 7.58 and as low as 5.38, with a median of 6.26.

Investors should also note that IMBBY holds a PEG ratio of 0.91. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IMBBY's PEG compares to its industry's average PEG of 2. Over the past 52 weeks, IMBBY's PEG has been as high as 1.03 and as low as 0.73, with a median of 0.82.

Another valuation metric that we should highlight is IMBBY's P/B ratio of 3.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. IMBBY's current P/B looks attractive when compared to its industry's average P/B of 5.07. IMBBY's P/B has been as high as 3.22 and as low as 2.29, with a median of 2.65, over the past year.

These are just a handful of the figures considered in Imperial Tobacco Group'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 IMBBY is an impressive value stock right now.


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