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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Ultrapar Participacoes (UGP) is a stock many investors are watching right now. UGP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.22, while its industry has an average P/E of 17.75. UGP's Forward P/E has been as high as 20.19 and as low as 6.92, with a median of 11.02, all within the past year.
UGP is also sporting a PEG ratio of 2.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UGP's industry has an average PEG of 3.02 right now. Within the past year, UGP's PEG has been as high as 4.03 and as low as 1.13, with a median of 2.65.
We should also highlight that UGP has a P/B ratio of 1.08. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.21. Within the past 52 weeks, UGP's P/B has been as high as 2.21 and as low as 0.97, with a median of 1.50.
Finally, we should also recognize that UGP has a P/CF ratio of 4.13. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. UGP's current P/CF looks attractive when compared to its industry's average P/CF of 11.16. Within the past 12 months, UGP's P/CF has been as high as 7.23 and as low as 3.46, with a median of 5.
These are only a few of the key metrics included in Ultrapar Participacoes'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, UGP looks like an impressive value stock at the moment.
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Ultrapar Participacoes S.A. (UGP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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