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Are Investors Undervaluing Paranaense de Energia (ELP) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Paranaense de Energia (ELP - Free Report) . ELP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.10, while its industry has an average P/E of 12.86. Over the last 12 months, ELP's Forward P/E has been as high as 14.21 and as low as 5.94, with a median of 10.48.

We should also highlight that ELP has a P/B ratio of 0.81. 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 1.52. Within the past 52 weeks, ELP's P/B has been as high as 1.10 and as low as 0.51, with a median of 0.86.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ELP has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.89.

Finally, investors will want to recognize that ELP has a P/CF ratio of 3.12. 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. ELP's current P/CF looks attractive when compared to its industry's average P/CF of 7.41. Within the past 12 months, ELP's P/CF has been as high as 6.47 and as low as 2.90, with a median of 3.80.

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


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