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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Ultrapar Participacoes (UGP) is a stock many investors are watching right now. UGP is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.56, while its industry has an average P/E of 20.61. Over the past 52 weeks, UGP's Forward P/E has been as high as 12.93 and as low as 6.92, with a median of 10.05.
Another valuation metric that we should highlight is UGP's P/B ratio of 1.34. The P/B ratio pits a stock's market value against 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 2.73. Over the past 12 months, 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. UGP's P/CF compares to its industry's average P/CF of 12.32. Over the past year, UGP's P/CF has been as high as 5.45 and as low as 3.46, with a median of 4.37.
These are just a handful of the figures considered in Ultrapar Participacoes'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 UGP is an impressive value stock right now.
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Ultrapar Participacoes S.A. (UGP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).