Should Value Investors Buy El Pollo Loco (LOCO) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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 company value investors might notice is El Pollo Loco (LOCO). LOCO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.89, which compares to its industry's average of 25.46. LOCO's Forward P/E has been as high as 16.11 and as low as 10.09, with a median of 13.86, all within the past year.Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LOCO has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.98.Finally, investors will want to recognize that LOCO has a P/CF ratio of 8.69. 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. LOCO's current P/CF looks attractive when compared to its industry's average P/CF of 21.80. Within the past 12 months, LOCO's P/CF has been as high as 10.13 and as low as 6.06, with a median of 7.55.These are only a few of the key metrics included in El Pollo Loco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LOCO looks like an impressive value stock at the moment.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks