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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Patria Investments Limited (PAX). PAX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.79 right now. For comparison, its industry sports an average P/E of 13.86. PAX's Forward P/E has been as high as 11.39 and as low as 7.42, with a median of 8.53, all within the past year.
Investors should also note that PAX holds a PEG ratio of 0.73. 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. PAX's PEG compares to its industry's average PEG of 0.88. Over the past 52 weeks, PAX's PEG has been as high as 1.66 and as low as 0.55, with a median of 0.70.
Another notable valuation metric for PAX is its P/B ratio of 1.63. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.13. Over the past year, PAX's P/B has been as high as 1.66 and as low as 1.06, with a median of 1.45.
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. PAX has a P/S ratio of 2.42. This compares to its industry's average P/S of 3.52.
Finally, we should also recognize that PAX has a P/CF ratio of 18.91. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 35.19. Within the past 12 months, PAX's P/CF has been as high as 20.70 and as low as 13.43, with a median of 17.40.
Value investors will likely look at more than just these metrics, but the above data helps show that Patria Investments Limited is likely undervalued currently. And when considering the strength of its earnings outlook, PAX sticks out as one of the market's strongest value stocks.
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Patria Investments Limited (PAX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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