Should Value Investors Buy Cementos Pacasmayo (CPAC) Stock?

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One company to watch right now is Cementos Pacasmayo (CPAC). CPAC is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.03, while its industry has an average P/E of 21.03. Over the past 52 weeks, CPAC's Forward P/E has been as high as 13.10 and as low as 7.26, with a median of 8.91.

Investors should also recognize that CPAC has a P/B ratio of 1.7. 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 5.04. Over the past 12 months, CPAC's P/B has been as high as 1.70 and as low as 1.25, with a median of 1.45.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CPAC has a P/S ratio of 1.45. This compares to its industry's average P/S of 2.2.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Cementos Pacasmayo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPAC feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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