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Are Investors Undervaluing Cracker Barrel Old Country Store (CBRL) Right Now?

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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Cracker Barrel Old Country Store (CBRL - Free Report) . CBRL is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 19.15 right now. For comparison, its industry sports an average P/E of 25.47. Over the past year, CBRL's Forward P/E has been as high as 22.15 and as low as 10.90, with a median of 15.40.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CBRL has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.9.

Finally, investors will want to recognize that CBRL has a P/CF ratio of 7.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.98. Over the past 52 weeks, CBRL's P/CF has been as high as 8.49 and as low as 4.59, with a median of 6.17.

Value investors will likely look at more than just these metrics, but the above data helps show that Cracker Barrel Old Country Store is likely undervalued currently. And when considering the strength of its earnings outlook, CBRL sticks out as one of the market's strongest value stocks.

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