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, 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.
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.
One stock to keep an eye on is Compania Cervecerias Unidas (CCU). CCU is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.96, which compares to its industry's average of 14.84. CCU's Forward P/E has been as high as 21.80 and as low as 12.44, with a median of 14.43, all within the past year.
Investors should also note that CCU holds a PEG ratio of 1.18. 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. CCU's PEG compares to its industry's average PEG of 1.64. Over the past 52 weeks, 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 frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CCU has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.92.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Compania Cervecerias Unidas is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CCU feels like a great value stock at the moment.
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Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).