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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Ultrapar Participacoes (UGP) is a stock many investors are watching right now. UGP is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.56, which compares to its industry's average of 18.15. UGP's Forward P/E has been as high as 14.06 and as low as 6.92, with a median of 10.19, all within the past year.
We also note that UGP holds a PEG ratio of 2.10. 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 currently sports an average PEG of 2.91. Within the past year, UGP's PEG has been as high as 3.42 and as low as 1.74, with a median of 2.51.
We should also highlight that UGP has a P/B ratio of 1.39. Investors use the P/B ratio to look at a stock's market value versus 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 2.34. UGP's P/B has been as high as 1.74 and as low as 0.97, with a median of 1.27, over the past year.
Finally, we should also recognize that UGP has a P/CF ratio of 5.12. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.42. UGP's P/CF has been as high as 5.87 and as low as 3.46, with a median of 4.65, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Ultrapar Participacoes is likely undervalued currently. And when considering the strength of its earnings outlook, UGP sticks out as one of the market's strongest value stocks.
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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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