Back to top

Image: Bigstock

Is Cervecerias Unidas (CCU) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Cervecerias Unidas (CCU - Free Report) is a stock many investors are watching right now. CCU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 21.92 right now. For comparison, its industry sports an average P/E of 27.98. Over the past year, CCU's Forward P/E has been as high as 26.01 and as low as 15.39, with a median of 22.51.

Investors should also note that CCU holds a PEG ratio of 2.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CCU's PEG compares to its industry's average PEG of 4.88. Over the past 52 weeks, CCU's PEG has been as high as 14.37 and as low as 2.11, with a median of 12.63.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CCU has a P/S ratio of 1.4. This compares to its industry's average P/S of 2.77.

Finally, our model also underscores that CCU has a P/CF ratio of 26.06. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CCU's P/CF compares to its industry's average P/CF of 86.31. Over the past 52 weeks, CCU's P/CF has been as high as 27.32 and as low as 15.58, with a median of 21.11.

These are only a few of the key metrics included in Cervecerias Unidas's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CCU looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Compania Cervecerias Unidas, S.A. (CCU) - free report >>

Published in