Pilgrim's Pride Corp (NASDAQ:PPC) Emerges as a Strong Value Pick with Solid Fundamentals

Pilgrim's Pride Corp (NASDAQ:PPC) stands out as a possible choice for value investors, following a screening method that focuses on stocks with solid fundamentals but lower prices. The "Decent Value" screen picks companies with a ChartMill Valuation Rating higher than 7, meaning the stock is priced well compared to earnings, cash flow, and other important measures, while also showing good scores in profitability, financial health, and growth. This method fits with value investing ideas, which aim to take advantage of market gaps by buying stocks that are priced below their true worth and have strong basic qualities.

Valuation: A Core Part of Value Investing

Pilgrim's Pride earns an 8 out of 10 in the ChartMill Valuation Rating, showing the stock is priced well compared to its basic measures. Key points from the fundamental analysis report include:

• A Price/Earnings (P/E) ratio of 8.01, much lower than the industry average (33.62) and the S&P 500 average (26.87). This suggests the stock is priced below its peers and the wider market.
• A Price/Forward Earnings ratio of 10.07, lower than 87.64% of industry rivals.
• A good Enterprise Value to EBITDA and Price/Free Cash Flow standing, doing better than over 80% of peers in the Food Products sector.

For value investors, these numbers matter—they show PPC is trading below its true value, offering a possible safety net.

Profitability: High Returns and Margins

Even with its low price, Pilgrim's Pride holds a high Profitability Rating of 8/10, supported by:

• Return on Assets (ROA) of 12.23% and Return on Equity (ROE) of 33.10%, both in the top 4% of the industry.
• A Profit Margin of 6.81%, better than nearly 79% of competitors.
• Rising Operating Margins (9.87%), showing good cost control.

Strong profitability is key for value stocks because it proves the company is making real profits—not just priced low due to hidden problems.

Financial Health: A Stable Debt Position

With a Health Rating of 6/10, Pilgrim's Pride has a mixed but acceptable financial state:

• A Debt to FCF ratio of 2.83, meaning it would take under three years of free cash flow to clear debt—better than 83% of peers.
• A Debt/Equity ratio of 0.83, showing reasonable borrowing but not too much risk.
• A solid Altman-Z score of 3.96, far above levels that signal bankruptcy risk.

While liquidity measures (Quick Ratio of 0.88) are weaker, the overall financial health is steady—a key factor for value investors who prefer stable balance sheets.

Growth: Past Success vs. Future Doubts

Pilgrim's Pride gets a Growth Rating of 5/10, showing strong past results but lower future expectations:

• EPS grew 65.93% YoY, with a 5-year yearly growth rate of 27.16%.
• Revenue increased at 9.40% yearly over the last five years.
• However, forward EPS estimates show a -4.02% drop, pointing to possible challenges.

Value investors often look for companies where short-term worries create a chance to buy, as long as the long-term basics stay strong.

Conclusion: A Value Stock to Consider

Pilgrim's Pride makes a strong case for value investors—it trades below peers, has good profitability, and keeps a fair financial position. While growth questions remain, the stock’s low price may already account for these risks, offering a possible safety margin.

For investors looking for similar options, the Decent Value Stocks screen can help find other low-priced stocks with solid basics.

Disclaimer: This article is not investment advice. Always do your own research or talk to a financial advisor before making investment choices.