Should Value Investors Buy Compania Cervecerias Unidas (CCU) Stock?

CCU

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 company value investors might notice is Compania Cervecerias Unidas (CCU - Free Report) . CCU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.06, while its industry has an average P/E of 21.45. Over the past year, CCU's Forward P/E has been as high as 17.41 and as low as 10.22, with a median of 12.90.

Investors should also note that CCU holds a PEG ratio of 0.81. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CCU's industry has an average PEG of 2.37 right now. Over the past 52 weeks, CCU's PEG has been as high as 1.12 and as low as 0.66, with a median of 0.83.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CCU has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.9.

Value investors will likely look at more than just these metrics, but the above data helps show that Compania Cervecerias Unidas is likely undervalued currently. And when considering the strength of its earnings outlook, CCU sticks out at as one of the market's strongest value stocks.

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