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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Patria Investments Limited (PAX). PAX is currently sporting a Zacks Rank #1 (Strong 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 13.95. Over the past 52 weeks, PAX's Forward P/E has been as high as 11.39 and as low as 7.42, with a median of 8.53.
Investors will also notice that PAX has 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 industry has an average PEG of 0.95 right now. PAX's PEG has been as high as 1.66 and as low as 0.55, with a median of 0.70, all within the past year.
Another valuation metric that we should highlight is PAX's P/B ratio of 1.63. The P/B ratio is used to compare a stock's market value with 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 3.42. Over the past 12 months, 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAX has a P/S ratio of 2.4. This compares to its industry's average P/S of 3.47.
Finally, investors will want to recognize that PAX has a P/CF ratio of 18.91. 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. PAX's current P/CF looks attractive when compared to its industry's average P/CF of 32.40. PAX's P/CF has been as high as 20.70 and as low as 13.43, with a median of 17.40, all within the past year.
These are only a few of the key metrics included in Patria Investments Limited'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, PAX looks like an impressive value stock at the moment.
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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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