Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Patria Investments Limited (PAX) is a stock many investors are watching right now. PAX is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.79, which compares to its industry's average of 13.24. Over the last 12 months, 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 popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PAX's PEG compares to its industry's average PEG of 0.84. 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 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 attractive against its industry's average P/B of 2.98. PAX's P/B has been as high as 1.66 and as low as 1.06, with a median of 1.45, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAX has a P/S ratio of 2.15. This compares to its industry's average P/S of 2.74.
Finally, investors will want to 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 30.66. Over the past 52 weeks, PAX's P/CF has been as high as 20.70 and as low as 13.43, with a median of 17.40.
These are just a handful of the figures considered in Patria Investments Limited's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PAX is an impressive value stock right now.
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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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