However, in inflationary environments, many times companies post higher sales (due to rising prices) but due to margin contraction further down the income statement, end up making fewer profits. In fact, if we value Pilgrim's sales by taking into account the company's debt & cash position, we get an EV/sales multiple of 0.50 which again looks attractive compared to the 5-year average comparable of 0.64. This multiple is the real calling card in this stock from a valuation standpoint as it is much cheaper than the sector (1.1) plus also the stock's 5-year average (0.46).

If we divide Pilgrim's trailing 12-month sales of $17.39 billion into the company's present market cap of $5.33 billion, we get a trailing price-to-sales ratio of 0.31. Pilgrim's Pride Technical Chart () Price To Sales Ratio We will look at the trends of the company's sales and book multiples (As sales & assets are what essentially cause earnings to happen) as well as the balance sheet to see if shares are worth buying around their present price point ($22.54). Therefore, let's delve into Pilgrim's Pride from a 'value' perspective to see if we can ascertain whether investors will eventually step in here on the long side in this latest down move. Shares still though are in bearish territory as the stock's 10-week moving average remains well below the corresponding 40-week average. The technicals once again demonstrate that history repeats itself many times in the financial markets as investor psychology in the main tends not to change. When we look at Pilgrim's technical chart, it is very interesting that the topping out of the share price in June of last year coincided with the top we saw in late 2019. These numbers are well ahead of the $4.165 billion in top-line sales as well as the $173 million gross profit number in Q1 of this year. In fact, both top-line sales & gross profit topped out in Q2 of last year at $4.63 billion & $677 million, respectively.

Not long though after we penned that piece, growth began to taper off pretty significantly in PPC and the share price has suffered as a result. We wrote about Pilgrim's Pride Corporation ( NASDAQ: PPC) approximately 12 months ago when we stated that the stock's keen valuation and growing sales reduced forward-looking risk in this play.

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