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 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.
One stock to keep an eye on is Ultrapar Participacoes (UGP). UGP is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.56 right now. For comparison, its industry sports an average P/E of 18.25. 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. 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 attractive against its industry's average P/B of 2.52. 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 metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. UGP's current P/CF looks attractive when compared to its industry's average P/CF of 11.77. 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).