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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Compania Cervecerias Unidas (CCU) is a stock many investors are watching right now. CCU is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.96, while its industry has an average P/E of 15.51. Over the past year, CCU's Forward P/E has been as high as 21.80 and as low as 12.44, with a median of 14.43.
Investors will also notice that CCU has a PEG ratio of 1.18. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CCU's PEG compares to its industry's average PEG of 1.70. Within the past year, CCU's PEG has been as high as 3.22 and as low as 0.99, with a median of 1.46.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. CCU has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.91.
These are just a handful of the figures considered in Compania Cervecerias Unidas'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 CCU is an impressive value stock right now.
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Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).