Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.
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 company value investors might notice is Ultrapar Participacoes (UGP). UGP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.56. This compares to its industry's average Forward P/E of 20.19. Over the past year, UGP's Forward P/E has been as high as 12.93 and as low as 6.92, with a median of 10.05.
We should also highlight that UGP has a P/B ratio of 1.34. 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. UGP's current P/B looks attractive when compared to its industry's average P/B of 2.76. Over the past year, UGP's P/B has been as high as 1.61 and as low as 0.97, with a median of 1.19.
Finally, investors will want to recognize that UGP has a P/CF ratio of 5.03. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.30. UGP's P/CF has been as high as 5.45 and as low as 3.46, with a median of 4.37, 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 Report
This article originally published on Zacks Investment Research (zacks.com).